Neal Dingmann

Neal Dingmann asked about the strong well performance in the Giddings play, inquiring if it's due to operational changes or the shift to pure development, and also questioned Magnolia's M&A strategy, specifically regarding the increasing prices for assets around their operating areas compared to other basins.

Answer

Chris Stavros, Chairman, President, and CEO, attributed the strong Giddings well performance to drilling into very good rock and improved well placement over time, rather than specific completion design changes. Regarding M&A, Mr. Stavros stated a preference for opportunities with undeveloped upside over large PDP-heavy deals, noting increased competition and elevated acreage prices. Brian Corales, Senior Vice President and Chief Financial Officer, mentioned recent bolt-on acquisitions.

Neal Dingmann asked about the continued outperformance of recent wells in the Giddings play, inquiring if notable operational changes or a shift to pure development were driving this upside. He also questioned Magnolia's M&A strategy, specifically regarding asset pricing in their operating area compared to other basins like the Permian, and the company's interest in PDP-heavy deals versus undeveloped upside.

Answer

Chris Stavros, Chairman, President, and Chief Executive Officer, attributed the strong well performance to drilling into very good rock and improved well placement over time, rather than specific completion design changes. Regarding M&A, Mr. Stavros noted increased competition and elevated acreage prices, particularly for larger opportunities. He expressed a preference for opportunities with undeveloped upside over PDP-heavy deals, which he believes often come with full or higher valuations.

Neal Dingmann inquired about Magnolia's well costs, specifically the balance between scientific testing and pure development in Giddings, and the strategy for its growing cash balance.

Answer

President and CEO Christopher Stavros explained that the company is now primarily in a development phase in Giddings, with scientific testing limited to newer areas. Regarding the cash balance, he noted a past instance where cash grew to $700 million and was patiently deployed on attractive acquisitions, indicating comfort with holding cash for a period to await the right opportunities.

Neal Dingmann inquired about the primary drivers of the continued growth and low reinvestment rate in the Giddings asset, and also asked about concerns regarding recurring third-party midstream outages and whether Magnolia would consider capital spending on its own infrastructure.

Answer

President and CEO Christopher Stavros attributed the Giddings success to a talented team and a deep understanding of the asset developed over six years, which allows for a subtler decline rate and strong well performance. He explained that acquisitions expand on this knowledge base. Regarding midstream issues, Stavros acknowledged the lack of control and expressed ongoing concern about power grid reliability, stating that while they work with third-party providers, significant capital investment in their own infrastructure is unlikely at this time.

Neal Dingmann asked about the main drivers behind Occidental's exceptionally low Permian well costs. He also inquired about the expected returns from the incremental upside provided by Enhanced Oil Recovery (EOR).

Answer

Richard Jackson, SVP and COO, attributed the low Permian well costs to a combination of operational efficiency improvements, re-evaluation of service contracts, and the scale achieved in the Midland Basin by integrating Oxy and legacy CrownRock teams. He stated that current EOR returns are 25%-35% and are expected to improve with increased uplift, emphasizing the goal of portfolio competitiveness.

Neal Dingmann asked about the service cost inflation and operational efficiency assumptions embedded in the 2025 production and CapEx guidance. He also sought Vicki Hollub's perspective on the M&A landscape for domestic assets and whether the company would consider boosting international M&A.

Answer

Richard Jackson, President, U.S. Onshore Resources and Carbon Management, detailed an expected 7% improvement in 2025 drilling and completion costs, driven by both operational efficiencies and market deflation. Vicki Hollub, President and CEO, stated that OXY is focused on organic growth within its existing high-quality international assets in Algeria, Oman, and Abu Dhabi, rather than pursuing new international M&A.

Neal Dingmann asked about Devon Energy's M&A strategy, specifically the significance of its 'ground game' in New Mexico lease sales and whether this approach will continue to be a major part of its M&A activities. He also questioned if the continued advancements and resource recognition in the Delaware Basin might lead Devon to reconsider its less-scaled plays like the Anadarko or PRB, potentially reallocating capital or selling assets.

Answer

CEO Clay Gaspar affirmed the importance of the 'ground game,' including quiet daily work, trades, and participation in state and federal lease sales, leveraging the Delaware Basin's scale, technology, and business optimization. Regarding portfolio strategy, Clay Gaspar stated that the company and its board continuously review all options, acknowledging that the current five-basin structure is not indefinite, and emphasized the importance of reinvention and objective evaluation for long-term shareholder value and sustainable growth.

Neal Dingmann inquired about Devon Energy's M&A strategy, specifically if the 'ground game' approach, exemplified by New Mexico lease sales, will continue to be a significant component of future acquisitions. He also asked if the strong performance and resource recognition in the Delaware Basin might lead Devon to reconsider its portfolio, potentially reallocating or selling assets from less-scaled plays like the Anadarko or PRB to further invest in Delaware.

Answer

CEO Clay Gaspar affirmed the importance of the 'ground game,' including trades and lease sales, leveraging the Delaware Basin's operational momentum, technology, and business optimization for scaling. He also stated that the company continuously evaluates its portfolio with the board, acknowledging that the current five-basin structure is not indefinite, and remains objective about opportunities to scale, grow, and create long-term shareholder value.

Neal Dingmann of Truist Financial Corporation asked about the increased capital allocation to the Rockies and whether it signals a plan for growth or simply maintaining stability. He also questioned the reasons behind Devon's strong midstream and takeaway capacity in the Delaware Basin.

Answer

COO Clay Gaspar clarified that the Rockies program, with three rigs at Grayson Mill, is designed to maintain relatively flat production while maximizing capital efficiency and returns. CFO Jeff Ritenour credited a multi-year team effort in securing gathering, processing, and long-haul capacity for oil, gas, NGLs, and water, which has de-risked operations in the Delaware Basin.

Neal Dingmann inquired about the company's capital allocation philosophy, specifically the preference between share buybacks and dividends. He also asked about potential future joint venture plans, particularly in emerging areas like power generation and nuclear, which peers have been exploring.

Answer

Chief Financial Officer Jeff Ritenour prioritized the fixed dividend, which he expects to grow, followed by a clear bias towards share repurchases given the stock's current valuation. On JVs, President and CEO Richard Muncrief confirmed active discussions with utilities and power pools, while COO Clay Gaspar added that the company is creatively exploring ways to connect its vast Delaware Basin gas resources to address regional electricity needs.

Neal Dingmann asked about Viper Energy's near-term and 2026 capital allocation strategy, considering the $700 million asset sale and projected free cash flow, specifically regarding debt repayment, distributions, and buybacks. He also inquired about the trending activity levels from third-party operators outside of Diamondback.

Answer

CEO Kaes Van't Hof explained that the asset sale provides line of sight to returning 100% of free cash to shareholders once net debt reaches $1.5 billion, leading to aggressive buybacks and significant cash distributions. President Austen Gilfillian added that third-party activity is strong, with Viper's asset base capturing almost half of all Permian activity (excluding Diamondback) with a consistent average NRI of around 1.5%.

Neal Dingmann inquired about the potential upside for Viper Energy (VNOM) from the Double Eagle carry, including its timing and magnitude, and asked for outgoing CEO Travis Stice's perspective on VNOM's future opportunities.

Answer

CEO Kaes Van’t Hof quantified the upside at a minimum of $50 million in cash flow in 2026 at $70 oil, with potential for growth, and noted active M&A opportunities in Reagan County. Outgoing CEO Travis Stice expressed strong confidence in Viper's team and growth runway, calling it a 'category killing company'.

Neal Dingmann asked about Viper's future well activity, specifically the operator mix driving the Q4 and 2025 production outlook, and whether the royalty interest percentages would change. He also inquired about the shareholder return policy, questioning if the Q3 payout of 83% of cash available for distribution represents a new target and how it balances with debt repayment.

Answer

Austen Gilfillian, Vice President, explained that near-term growth will be driven by a significant increase in Diamondback-operated work-in-progress wells, followed by a step-up in activity from third-party operators, partly due to the Tumble Wheat acquisition. CEO Travis Stice clarified that the 83% payout was a one-time event to accommodate new shareholders from the Tumble Wheat deal and that the company's policy remains a 75% minimum payout, which he noted is well-protected.

Neal Dingmann inquired about Diamondback Energy's activity levels and capital discipline compared to other Permian operators, and later asked about the differentiating factors in Diamondback's development style, specifically regarding slide eight.

Answer

Kaes Van't Hof (CEO, Diamondback Energy) stated that Diamondback maintains conviction in its plan, focusing on generating free cash flow per share with a low reinvestment rate (36% at mid-60s oil) and a lower cost structure, rather than accelerating activity like some peers. Regarding development style, Kaes Van't Hof emphasized that slide eight highlights Diamondback's ability to drill more wells per section with improved performance per well, leading to higher overall returns per section, especially through co-development of all zones in the Midland Basin. Danny Wesson (COO, Diamondback Energy) added that the merger with Endeavor improved the pro forma average PB 10 per well by almost 20%.

Neal Dingmann asked about Diamondback Energy's activity and capital discipline compared to other Permian operators, questioning if others' acceleration at current prices would change Diamondback's plans. He also inquired about the differentiators in Diamondback's development style, particularly regarding slide eight and the impact of larger projects.

Answer

Kaes Van't Hof (CEO, Diamondback Energy) affirmed conviction in their plan, focusing on free cash flow per share growth with a 36% reinvestment rate at mid-60s oil, lower share count, and net debt. He highlighted slide eight as crucial, showcasing Diamondback's low-cost structure, execution, and capital-efficient co-development of all Midland Basin zones for higher returns per section/DSU.

Neal Dingmann asked about the key drivers behind Diamondback's improved free cash flow sensitivity and inquired about the company's D&C plans, specifically regarding SimulFRAC crew efficiency and the strategy for drawing down drilled but uncompleted (DUC) wells.

Answer

President Kaes Van't Hof explained that the improved free cash flow breakeven is a result of capital efficiency improvements and accretive deals like Endeavor. He noted that the DUC drawdown is significant due to being ahead of schedule and acquiring DUCs in recent deals, but the company has the flexibility to drill more if conditions are favorable. He also highlighted that SimulFRAC fleets are now completing about 100 wells per year, up from 80, with potential upside to 110-120.

Neal Dingmann inquired about Diamondback's capital efficiency, the outlook for free cash flow per barrel, and the company's updated corporate breakeven oil price following the Endeavor acquisition. He also asked for details on the valuation methodology behind the recent asset trade with TRP.

Answer

President and CFO Kaes Van't Hof explained that the Endeavor assets improve free cash flow margins and have lowered the post-dividend corporate breakeven from $40 to $37 per barrel, creating capacity for a potential base dividend increase in 2025. Regarding the TRP trade, he stated that while PDP values were similar, Diamondback upgraded its portfolio by swapping lower-quartile inventory for 18 DUCs and 55 top-quartile locations in its core Midland Basin operating area.

Neal Dingmann asked about the key drivers behind Permian Resources' consistent operational efficiencies, questioning if they stem from asset integration or other factors. He also inquired about the company's shareholder return framework and how it plans to allocate free cash flow beyond the base dividend.

Answer

Co-CEO William Hickey attributed the efficiency gains to a deeply ingrained company culture of continuous improvement and a hyper-focus on the Delaware Basin, noting that M&A primarily serves to showcase this cost structure. Executive Hays Mabry stated that the primary goal for shareholder returns is to grow the base dividend annually, with excess cash allocated to the highest-return opportunities, including debt reduction, buybacks, or M&A.

Neal Dingmann asked about Permian Resources' 2025 operational plans, including the D&C focus between New Mexico and Texas, and the potential upside from its surface acreage and take-in-kind gas rights.

Answer

Co-CEO William Hickey stated that the 2025 capital allocation will remain focused on New Mexico, similar to previous years, and that regulatory easing would offer flexibility but is not essential. Co-CEO James Walter added that surface acreage could be monetized or developed for infrastructure, potentially tied to AI-driven power demand, while the goal for take-in-kind gas is to shift sales to higher-priced Gulf Coast markets over time.

Neal Dingmann questioned whether Kinder Morgan would consider selling its energy transition assets to fund its natural gas projects and if the current turbulent market creates more M&A opportunities.

Answer

CEO Kimberly Dang stated that selling assets is not the preferred way to fund growth, as the company likes its current asset base and can fund its CapEx from cash flow, balance sheet capacity, or by bringing in project partners at an attractive cost of capital. Regarding M&A, she suggested that while market turbulence could present opportunities over the longer term if it causes distress, the initial reaction is often for participants to step back and let things settle.

Neal Dingmann from Truist Securities asked about business performance drivers beyond commodity prices that influenced 2024 results versus guidance, the sustainability of the ~$5 billion project backlog, and the capital spending outlook for the CO2 segment.

Answer

President Kimberly Dang detailed that strong performance in natural gas transmission and storage offset weakness in gathering volumes, and noted that 2025 would be influenced by G&P volumes, rate escalators, and project contributions. She also stated the backlog could potentially grow with new significant projects. Anthony Ashley, VP of CO2, confirmed the recent approval of a ~$145 million project but expects overall annual expansion spending to remain around $200 million without a material near-term increase.

Neal Dingmann inquired about the M&A environment, asking where Mach Natural Resources sees better acquisition opportunities between gas and oil assets, and whether the company would consider monetizing its significant infrastructure.

Answer

CEO Tom Ward responded that while the company evaluates all deals, it would currently lean towards a crude oil acquisition, especially with oil prices in the $60s. He affirmed that Mach plans to retain its midstream assets, as they are critical to operations and generate more EBITDA annually than their total purchase price.

Neal Dingmann from Truist Securities questioned the current M&A landscape, asking for a comparison of gas versus oil deal opportunities and activity outside the Mid-Con. He also inquired how the returns from deeper Mississippian wells compare to Mach's other top-tier drilling locations.

Answer

Executive Tom Ward confirmed Mach is actively looking at both oil and gas deals beyond the Mid-Con, including in the ArkLaTex and around the Permian. He described the Custer County deep gas wells as "extraordinarily good" and highly competitive from a rate-of-return perspective, even at current commodity prices.

Neal Dingmann inquired about the ramp-up and potential upside of the ERCOT power project, as well as the opportunity for additional midstream gas contracts beyond the one already announced.

Answer

CFO Philip Riley detailed the ERCOT project's progress, noting procurement of thermal generation and interconnection agreements are complete, with construction starting next quarter for a potential Q4 2025 in-service date. He framed it as a hedge against poor gas basis. CEO Bobby Riley added that the midstream strategy in New Mexico is designed to gain control over their gas molecules and avoid third-party takeaway constraints, replicating their successful approach in Texas.

Neal Dingmann inquired about Riley's capital efficiency and its 2025 drilling and completion plans, specifically asking how different oil price scenarios ($60 vs. $80) might affect growth. He also asked for details on the potential upside and key milestones for the RPC Power joint venture.

Answer

CFO Philip Riley explained that while 2025 guidance isn't set, the company's strategy of growth through development will likely continue. He noted that hedging provides a cushion against price volatility, with a $60 environment potentially leading to slightly less growth but stable production. Regarding the power JV, Riley detailed the two phases: the behind-the-meter project, which is already installed, and the larger merchant project selling to ERCOT, which is progressing on permitting and financing with projects scheduled for mid-2025.

Neal Dingmann inquired about the current supply chain for new compression equipment, specifically delivery times, and whether Kodiak maintains customer relationships through the ongoing wave of E&P consolidation.

Answer

CEO Mickey McKee reported that equipment delivery times are holding steady at around 45 weeks and that Kodiak is proficient at managing these logistics. He expressed high confidence in retaining customers through M&A, noting the prohibitive costs of swapping providers and the need for even the largest producers to have strategic compression partners in basins like the Permian.

Neal Dingmann asked about the key drivers behind the rapid recovery of segment margins to 66% post-CSI acquisition and the outlook for shareholder returns and leverage.

Answer

CFO John Griggs explained that the margin recovery to pre-acquisition levels was driven by setting new units at higher market rates, repricing the existing fleet, and realizing the majority of the planned $30 million in synergies. He reiterated the capital allocation framework: grow EBITDA, pay a dividend of roughly 35% of discretionary cash flow, and achieve the 3.5x leverage target by year-end 2025.

Neal Dingmann from Truist Securities asked for an update on the MOU with Net Power, seeking potential catalysts or next steps. He also inquired if the company anticipates receiving more Class 6 permits separately from this project.

Answer

CEO Francisco Leon grouped the Net Power and National Cement MOUs as key long-term partnerships in hard-to-abate sectors that will provide sustainable cash flow for the CCS business. He emphasized that CRC is being highly selective, partnering with entities that bring their own capital for capture systems. Mr. Leon identified progress on lifting the CO2 pipeline moratorium as the next major catalyst to watch for these projects.

Neal Dingmann of Truist Securities asked about EOG's potential involvement with data centers and power generation, and inquired about the location and strategy for its expanding Utica acreage.

Answer

CEO Ezra Yacob identified the U.S. Gulf Coast as a potential future hub for data centers located near energy sources, which would benefit the Dorado gas play. He also clarified that recent Utica leasing has focused on coring up positions within the volatile oil window, where the company is concentrating its current development and data gathering efforts.

Neal Dingmann asked about the prospectivity of the western side of the Utica play and the nature of its well declines. He also inquired about the remaining inventory life in the Delaware, Eagle Ford, and Bakken basins at current activity paces.

Answer

SVP of E&P Keith Trasko stated the current Utica focus is the volatile oil window, with declines behaving like a typical tight shale combo play, similar to the Eagle Ford. Chairman and CEO Ezra Yacob addressed inventory by emphasizing EOG's 10 billion BOE of premium resource. He explained that investment pace is set to maximize returns, not just inventory life, and that technology continues to unlock new potential, especially in the Delaware Basin, making a simple 'years remaining' calculation less relevant.

Neal Dingmann asked if Crescent's management is satisfied with the company's current scale or if they see significant opportunities for smaller, fill-in acquisitions, and whether this increased scale is yielding better service cost pricing.

Answer

CEO David Rockecharlie responded that while they are satisfied with the performance of recent acquisitions, they still see tremendous bolt-on opportunities, particularly in the Eagle Ford, and will remain disciplined. He confirmed that increased scale is driving efficiencies, from optimizing internal resources to securing better terms with service providers, especially when integrating assets from sellers who had a less unified operational approach.

Neal Dingmann asked about Crescent's ability to pivot between liquids-rich and natural gas development in the Eagle Ford and inquired about the progress on capital efficiency improvements, such as simul-fracs, following the SilverBow acquisition.

Answer

An executive, identified as Clay, confirmed that the SilverBow acquisition provides significant commodity mix optionality, allowing a current focus on liquids with the flexibility to switch to gas. David Rockecharlie, an executive, added that while they are in the 'early days' of realizing integration benefits, they are pleased with the progress and see significant opportunities for further efficiencies.

Neal Dingmann from Truist Securities inquired about Sitio's M&A strategy, specifically the nature of its deal flow compared to broader market auctions, and asked for an outlook on operator activity for the remainder of 2025.

Answer

CEO Christopher Conoscenti emphasized that Sitio's M&A success is driven by a consistent, relationship-based approach focused on high-return, small- to medium-sized deals, with only 2 of 16 deals in 2024 coming from auctions. He highlighted a 20% compounded annual growth in production per debt-adjusted share since going public. Regarding 2025 activity, Conoscenti noted that guidance is underpinned by already spudded wells and permits, providing high confidence, and that any M&A would be additive to the projected 3% organic growth.

Neal Dingmann inquired about the key drivers for the increase in Sitio's line-of-sight wells, asking if the growth was primarily concentrated in the Permian and DJ basins.

Answer

CEO Christopher Conoscenti and COO Jarret Marcoux responded, directing attention to the investor deck which illustrates broad activity across the entire asset footprint, not just one or two basins. They highlighted the diversity of locations in the Midland and Delaware Basins, Texas, New Mexico, and the DJ Basin. Marcoux added that the 9,000 gross normalized line-of-sight wells provide significant confidence in future activity.

Neal Dingmann inquired about the impact of recent commodity price volatility on operator activity and the current M&A landscape, specifically asking which basins are most active.

Answer

CEO Christopher Conoscenti stated that operator activity has not seen a meaningful change, as efficiency gains allow them to 'do more with less.' He confirmed the line-of-sight well inventory remains strong despite a quarterly decrease from a high Q1. For M&A, Conoscenti identified the Permian and DJ Basins as the most active areas, noting the Permian remains highly competitive.

Neal Dingmann asked about the balance between service cost deflation and operational efficiencies in the 2025 guidance, and whether there was potential for smaller, 'white space' fill-in acquisitions in the Permian and Montney.

Answer

Executive Brendan McCracken noted that while low single-digit deflation is factored in, the majority of gains are from true operational efficiencies. Executive Gregory Givens highlighted record drilling speeds as a key driver. On M&A, McCracken reiterated that the bar is very high, and the focus is on swaps and coring up existing acreage rather than bolt-on deals.

Neal Dingmann from Truist Securities inquired about the specific drivers behind Ovintiv's continued production outperformance and capital efficiency. He also asked for details on the optimized Permian program, questioning what is driving record returns and lower well costs.

Answer

Executive Brendan McCracken attributed the success to a broad, intentional focus on free cash generation, underpinned by a strong data strategy, a culture of innovation including AI/ML, and learning from peers. Executive Gregory Givens added that Permian success is a combination of high-performance rigs, efficient frac fleets, optimized well design, and faster cycle times, which allowed them to reduce their rig count from six to five.

Neal Dingmann questioned if Chord can continue to achieve operational efficiencies, particularly with the shift to longer laterals, and where those gains might originate. He also asked for an update on the M&A landscape and how actively Chord might participate given its strong balance sheet.

Answer

CEO Daniel Brown affirmed that efficiency gains will continue through incremental improvements on 3-mile laterals and more significant gains on the newer 4-mile program as the company gets more practice. On M&A, Brown emphasized that while scale is advantageous, any deal must make the company "better, not just bigger." He stated Chord will remain patient and only pursue transactions that deliver clear, full-cycle shareholder value.

Neal Dingmann asked about Chord Energy's 3-year plan, questioning its sensitivity to commodity prices and how operational efficiencies would impact capital allocation. He also inquired about the variability of well breakevens across the company's acreage, particularly between western areas and the historic core.

Answer

CEO Daniel Brown explained that future operational efficiencies would prioritize increasing free cash flow over raising activity levels. He stated the 3-year plan is stable at current commodity prices but could be adjusted in response to significant market shifts. Brown also noted that longer laterals and wider spacing in the western part of the basin are delivering economic returns comparable to the historic core, enhancing the value of the entire portfolio.

Neal Dingmann inquired if ONEOK's production expectations have changed based on recent producer plans and asked about opportunities to accelerate growth on the newly acquired EnLink assets.

Answer

CCO Sheridan Swords confirmed that production expectations are 'at or above' prior levels, citing benefits from producer consolidation in the Bakken and increased activity in the Mid-Continent. He expressed significant optimism for the EnLink assets, highlighting a focused team pursuing growth in the Permian and an expanded footprint in the Mid-Continent that is creating new opportunities to serve producers.

Neal Dingmann of Truist Securities asked about the underlying assumptions for the 2025 EBITDA outlook and for commentary on ethane price volatility and its relationship with regional natural gas prices.

Answer

CFO Walter Hulse stated that the 2025 outlook was directional and that detailed guidance would be provided in February. Sheridan Swords, Executive Vice President, reiterated that ethane recovery decisions are primarily driven by the price of natural gas in specific regions, such as the Bakken, Mid-Continent, and Permian, rather than a single national price.

Neal Dingmann asked about opportunities for further operational efficiency gains in the Permian and Marcellus, and whether the upcoming Marcellus activity would focus on the Lower zone or co-development with the Upper zone.

Answer

SVP of Operations Blake Sirgo highlighted ongoing gains in drilling, frac, and well management, with a new focus on rightsizing frac designs using ML models. SVP of Business Units Michael Deshazer confirmed that the 2025 plan includes both overfilling with Upper Marcellus wells and co-development. Chairman, CEO and President Thomas Jorden added that the new lower cost structure makes both zones highly attractive.

Neal Dingmann asked about future plans for the Anadarko Basin, including potential limitations from the lease position and interest in bolt-on acquisitions. He also questioned the sustainability of the company's high production growth and shareholder payout levels.

Answer

Tom Jorden, CEO, confirmed they have a deep inventory in the Anadarko but would consider value-accretive bolt-on acquisitions. Shannon Young, CFO, addressed shareholder returns, reaffirming the commitment to return 50% or more of free cash flow. He noted that continued buybacks are supported by the company's view of its intrinsic value, its strong free cash flow profile, and its robust liquidity position.

Neal Dingmann of Truist Securities asked for additional details on the notable drivers behind the strong 2025 EBITDA guidance and inquired about current demand and utilization trends for the key 3Bear assets in the Delaware Basin.

Answer

President Avigal Soreq attributed the strong guidance to the combined impact of the H2O Midstream and Gravity acquisitions, the Wink to Webster pipeline contribution, and the Libby plant expansion with its associated acid gas injection project. Regarding the 3Bear assets, he confirmed that strong producer demand and the success of the company's comprehensive crude, gas, and water offering justified the ongoing expansion projects.

Neal Dingmann of Truist Securities asked about the integration of the H2O Midstream acquisition with the 3 Bear assets and its potential to accelerate third-party cash flow. He also questioned the company's capital allocation priorities, specifically the balance between distribution growth and debt reduction.

Answer

President Avigal Soreq confirmed the H2O Midstream integration is 'pretty much done' across operations and systems, creating valuable bundling opportunities for crude and water services. On capital allocation, Soreq emphasized a commitment to continuing the streak of distribution increases (currently 47 consecutive) while balancing growth and maintaining a long-term leverage target of 3.5x. SVP Odely Sakazi added that the company is managing its growth opportunities in a sustainable manner.

Neal Dingmann asked about the opportunity set and expected activity levels in the Delaware Basin. He also inquired about the company's confidence in its midstream infrastructure in both the Permian and DJ basins.

Answer

CEO Chris Doyle explained that after optimizing development plans to extend lateral lengths, the company is increasing capital allocation to the higher-return Delaware Basin, with activity growing from 20% of completions in 2024 to about 40% in 2025. Regarding infrastructure, Doyle acknowledged a Q1 third-party processor issue in the DJ but stated the team managed it well and feels confident in its ability to execute the 2025 plan, including managing water and gas takeaway.

Neal Dingmann asked about Civitas's future activity split between the Permian and DJ basins, questioning if a 3:1 rig ratio is optimal, and inquired about the drivers that would alter the company's shareholder return framework.

Answer

CEO M. Doyle stated that returns, not a fixed ratio, will drive activity splits between basins, with a focus on maximizing free cash flow and maintaining flat production. CFO Marianella Foschi added that the current shareholder return framework effectively balances debt reduction and buybacks, and while they aim for a peer-leading yield, the priority remains on strengthening the balance sheet.

Neal Dingmann inquired how the Badlands asset fits into the overall integrated NGL strategy and if Targa would consider selling it. He also asked about the timing for new capital on the North Texas to Mont Belvieu NGL pipeline system.

Answer

CEO Matt Meloy explained that the Badlands asset is synergistic, as its NGLs feed into Targa's downstream fractionation and export system, and owning 100% enhances strategic flexibility. President, Logistics and Transportation, Scott Pryor clarified that the system has existing operating leverage, and third-party offload agreements provide flexibility on the timing for a new long-haul pipeline expansion.

Neal Dingmann asked about the Permian Basin activity outlook, specifically the rig activity underpinning the favorable gas forecast, and questioned if any potential M&A could delay the expected 2025 free cash flow inflection.

Answer

Executive Patrick McDonie stated that one in every three rigs in the Permian is on Targa acreage, with robust activity from diverse producers driving a strong gas growth outlook. Executive Matt Meloy affirmed confidence in achieving a 'significant amount of free cash flow in 2025' and noted that while they evaluate bolt-on M&A, the bar remains 'very high,' with the priority being organic execution.

Asked if the 2025 Uinta plan has changed due to refinery status and about expectations for differentials. Also inquired about future reserve expectations for Uinta and the reason for the decrease in Midland reserves.

Answer

The company confirmed no changes to the 2025 Uinta plan, as they manage refinery downtime with storage, which affects sales timing. Uinta reserves will be optimized over time like other assets. The Midland reserve decrease was primarily due to a slowdown in activity causing some PUDs to fall outside the 5-year development window, not due to asset performance.

Neal Dingmann inquired if the 2025 Uinta program has been altered by refinery statuses and asked about expectations for price differentials. He also asked about future reserve expectations for Uinta and the reason for the decrease in Midland reserves.

Answer

President and CEO Herbert Vogel and COO Beth McDonald confirmed the 2025 activity plan for Utah is unchanged by refinery maintenance, which only affects sales timing. Regarding reserves, Ms. McDonald explained the Midland decrease was not due to performance but primarily from PUDs falling outside the 5-year development window as activity was reallocated post-acquisition. She noted Uinta reserves will be optimized and grown over time.

Neal Dingmann of Truist Securities asked if the 2025 Uinta program has been altered by refinery statuses, inquired about future price differentials, and sought reasons for the decrease in Midland reserves.

Answer

CEO Herbert Vogel stated that refinery turnarounds are expected and affect sales timing, but COO Beth McDonald confirmed there are no changes to the 2025 activity plan for Utah. Regarding reserves, McDonald explained the Midland reserve decrease was primarily due to PUDs moving beyond the 5-year development window as activity was reallocated to Uinta, not due to poor well performance.

Neal Dingmann inquired about the basis for NOG's optimism for significant production growth in late 2025 and 2026, and whether management's view on the Uinta Basin asset has changed given recent operator performance.

Answer

CEO Nicholas O'Grady explained that the 2026 growth confidence stems from spudding more wells than are being completed in 2025, with back-half weighted completions providing a full-year contribution in 2026. He reaffirmed a strong, long-term conviction in the Uinta asset, stating it's too early to judge its performance and that recent market transactions validate their purchase price.

Neal Dingmann inquired about NOG's operational and financial protections against market volatility and how the company's capital allocation framework has evolved.

Answer

CEO Nicholas O'Grady highlighted the business model's flexibility, citing the ability to pivot capital to the Ground Game during downturns, as seen in 2020. He confirmed the capital allocation framework remains return-driven, prioritizing organic drilling, followed by Ground Game and acquisitions. CFO Chad Allen added that due to recent acquisitions, near-term focus will include debt reduction while keeping all capital return options open.

Neal Dingmann inquired about the early performance of the Point Energy assets and sought clarification on the underperformance of recent wells in Upton County.

Answer

Katie Hill, SVP and COO, confirmed that the Point Energy assets are outperforming initial expectations due to better-than-expected downtime, strong new wells, and reduced LOE costs. President and CEO Mikell Pigott explained that the Upton County well underperformance was isolated to tests in newer formations (Wolfcamp A, Lower Spraberry) on the eastern edge of the play and that the company's overall inventory of 925 locations has already been adjusted for these results.

Neal Dingmann inquired about the primary drivers for the targeted D&C cost reduction to $925 per foot, asking how much is attributable to lateral length versus other efficiencies. He also asked for details on the 2025 operational split between the Delaware and Midland basins and the potential LOE trajectory following the Point acquisition.

Answer

CEO Mikell Pigott expressed excitement about the progress, after which COO Katie Hill provided details. Hill explained that the $925/foot target is driven by a combination of operational efficiencies already achieved (like reducing drilling cycle times from 25-30 days to ~20 days), future planned improvements, and the ability to drill longer laterals. For 2025, she stated that approximately 75% of capital will be allocated to the Delaware Basin (split between Point and other assets) and 25% to the Midland. Regarding LOE, Hill noted that while Q4 guidance is higher ($9.35/BOE) due to integration, they expect to drive costs back down to the high $8 range by the end of 2025.

Neal Dingmann asked about Matador's midstream business, questioning if the system is now largely developed given lower CapEx guidance, and inquired about potential opportunities to monetize the asset, such as bringing in a partner.

Answer

Founder, Chairman and CEO Joseph Wm. Foran explained that they discuss midstream strategy daily and will continue to expand the system to ensure flow assurance as long as they are active in the basin. Executive Gregg Krug added that they are focused on projects enhancing flow assurance and noted the Ameredev acquisition included 180 miles of pipeline not yet integrated into their San Mateo system, representing further opportunity.

Neal Dingmann from Truist Securities asked why Matador prioritizes fixed dividends over stock repurchases for shareholder returns, especially given strong insider buying that suggests shares are undervalued.

Answer

Joseph Wm. Foran, Founder, Chairman, and CEO, explained that the company favors a growing fixed dividend as it benefits all long-term shareholders, a preference he stated has been overwhelmingly confirmed by investors at annual meetings. While open-minded about buybacks, Foran noted they can sometimes just provide an exit for short-term investors. He added that once leverage is reduced, buybacks could receive greater consideration.

Jack Wilson, on behalf of Neal Dingmann of Truist Securities, inquired about the growth momentum and potential for further expansion on the Northwest Pipeline system and asked about any cross-border impacts from the Huntington connector.

Answer

CEO Alan Armstrong stated that demand for capacity expansions in the Northwest has accelerated faster than expected in the last 6-9 months and that recent service requests suggest this growth will continue. COO Michael Dunn confirmed that the Huntington connector is a "nonfactor" regarding cross-border impacts.

Speaking for Neal Dingmann, Jack Wilson asked about the near-term flexibility on the Transco system to serve smaller, data center-driven demand and what such connections would require.

Answer

CEO Alan Armstrong confirmed that yes, they can and are looking at making relatively small, direct expansions of Transco to serve data center demand. He noted that the feasibility and requirements are highly dependent on the size and scale of the specific facility, differentiating between smaller loads and hyperscale data centers.

Neal Dingmann asked about the timing of potential opportunities in the Eastern Eagle Ford following the Ironwood acquisition and how opportunistic buybacks fit into the capital allocation strategy.

Answer

Jeremy Goebel, an executive, indicated that new Eastern Eagle Ford opportunities would likely materialize next year, as the immediate focus is on integration. Al Swanson, EVP and CFO, reiterated that share buybacks are opportunistic and reserved for significant market dislocations, with the company's preference being to return capital via distribution increases.

Neal Dingmann asked if producer activity is on track for year-end, whether any infrastructure constraints remain, and how the NGL segment has changed operationally and financially following the shift to long-term, fee-based contracts.

Answer

EVP & CCO Jeremy Goebel confirmed producer activity is on track, noting that while some constraints like New Mexico gas takeaway existed, the industry is actively resolving them. Chairman & CEO Willie Chiang explained that the NGL segment's shift from margin-based to fee-based contracts is designed to create more stable and durable cash flows, reducing volatility even if it means forgoing some of the upside from commodity price spreads.

Neal Dingmann inquired about the strategic rationale for potential M&A deals in the current market and asked about the company's hedging strategy for C3+ sales going forward.

Answer

Executive Jeremy Goebel reiterated Plains' disciplined M&A approach, stating they would only pursue deals where they can extract significant synergies and be more competitive than others. On hedging, he confirmed that the company is rigorous in locking in economics and does not leave significant unhedged exposure for its NGL barrels.

Neal Dingmann from Truist Securities asked for a broad perspective on the M&A landscape, inquiring if opportunities that fit ConocoPhillips' criteria are better or worse than a year ago.

Answer

Chairman and CEO Ryan Lance responded that industry consolidation will continue, but the landscape of high-quality opportunities is shrinking following recent transactions. He reiterated the company's strict M&A criteria: any deal must fit their financial framework, the assets must be improved within their portfolio, and the transaction must make the overall company and its 10-year plan better. He described the Marathon deal as a unique opportunity that arose, rather than the result of an active search.

Neal Dingmann inquired about the specific drivers behind the strong Q3 well performance in the Lower 48, asking if it stemmed from a particular area or operational improvement.

Answer

Nick Olds, EVP of Lower 48, credited the outperformance to multiple factors, including strong base production, continued operating efficiencies leading to more feet per day, and the use of technology like the Drilling Intelligence Group. He highlighted record production in the Permian and Eagle Ford, a successful turnaround in the Eagle Ford, and strong performance from 3-mile laterals in the Midland Basin, while noting the well cadence created some lumpiness.

Neal Dingmann inquired about the outlook for G&P processing spreads and asked for the company's macro view on commodity prices for the remainder of the year.

Answer

An executive noted that processing spreads are expected to remain stable, largely influenced by low Waha gas prices. On the macro front, another executive commented that oil prices appear range-bound due to OPEC+ actions, Permian rich gas production continues to exceed expectations, and the long-term outlook for natural gas is constructive due to LNG and power generation demand.

Neal Dingmann asked about expansion plans for Enterprise's petrochemical systems and the need for more export capacity, and also questioned if the marketing business would remain strong due to Waha gas price volatility.

Answer

Executive F. D'Anna confirmed they are expanding their ethylene pipeline and export capacity, citing a significant growth opportunity from expected cracker shutdowns in Europe. Executive Brent Secrest affirmed that with 370 million cubic feet per day of open capacity exposed to the Waha spread, the marketing business is expected to remain a strong contributor.

Neal Dingmann inquired about the weak fourth-quarter downstream results, asking whether they were driven more by scheduled turnarounds or by broader macroeconomic pressures on margins.

Answer

CEO Mike Wirth attributed the weak quarter to a confluence of factors, including soft margins, turnaround activity, and significant negative inventory accounting effects. He characterized it as a quarter where multiple items moved in a negative direction but affirmed there was no structural deterioration in the business.

Neal Dingmann asked about the assumed annual capital and operating expense levels required to achieve the company's long-term plan of growing earnings by $20 billion and cash flow by $30 billion by 2030.

Answer

CFO Kathy Mikells reiterated CapEx guidance of $27-29 billion for 2025 and $28-33 billion annually from 2026-2030. She noted that OpEx growth will be offset by an additional $6 billion in structural cost savings by 2030. CEO Darren Woods added that the company has a proven track record of growing the business while simultaneously reducing overall costs.

Neal Dingmann asked about the assumed annual capital spend and OpEx levels required to achieve the company's 2030 targets for earnings and cash flow growth.

Answer

CFO Kathy Mikells reiterated the capital guidance of $27-29 billion for 2025 and $28-33 billion annually for 2026-2030. She noted that OpEx from growth will be partially offset by an additional $6 billion in structural cost savings by 2030. CEO Darren Woods added that from 2019-2024, the company more than offset costs from growth and inflation.

Neal Dingmann from Truist Securities inquired about the Gulf of Mexico, asking about the expected level of workover and development activity needed to maintain relatively flat production. He also sought clarification on the timing and magnitude of capital spending for both development and exploration activities in Vietnam.

Answer

President and CEO Eric Hambly detailed a fairly active workover schedule for the first half of the year in the Gulf of Mexico, including the Samurai 3, a Marmalard sidetrack, and a Khaleesi safety valve fix, noting no further workovers are planned for the second half. An unnamed executive added specific production rates for these wells. Regarding Vietnam, Hambly specified a $110 million net capital allocation for the Lac Da Vang development in 2025, a $10 million net cost for the Lac Da Vang exploration well, and a ballpark estimate of $20 million net for the Hai Su Vang appraisal well.

Neal Dingmann inquired about Murphy's 2025 operational plans, asking how capital spending would be adjusted in different oil price scenarios and about the cost and potential upside of the Vietnam exploration wells compared to Gulf of Mexico wells.

Answer

President and COO Eric Hambly stated that the company remains committed to its plan for low single-digit CAGR oil-weighted growth through 2026 with roughly $1.1 billion in average annual CapEx. He noted 2025 production should be similar to or slightly higher than 2024, with higher oil output from the Eagle Ford. Hambly detailed the significant potential of the Vietnam prospects, with the Hai Su Vang well targeting a mean of 170 million barrels of oil equivalent, potentially creating a material business producing 30,000-50,000 bbl/d by the end of the decade. CEO Roger Jenkins added that this strategy mirrors their past success in Malaysia.

Neal Dingmann inquired about activity trends in the Marcellus basin and whether a step-up was expected later in the year. He also asked how management weighs the prospects of share buybacks against significant new growth capital investments.

Answer

EVP and COO Gregory Floerke confirmed that Marcellus activity is proceeding as expected, with high utilization supporting the new Harmon Creek III plant. President and CEO Maryann Mannen reiterated that the distribution is the primary capital return tool, followed by disciplined investment in high-return projects, with share repurchases remaining an opportunistic tool to be used when the equity is seen as undervalued.

Neal Dingmann asked if producer deferrals of drilled but uncompleted (DUC) wells in the Appalachia region would impact MPLX's Marcellus volumes. He also inquired if the progress on the Mountain Valley Pipeline (MVP) was boosting volumes at the Mobley processing plant.

Answer

Executive Gregory Floerke stated that they see no material impact from DUC deferrals, as producer plans vary. He confirmed that MVP's progress is a boost for the entire region by increasing residue gas takeaway capacity. He also noted that the shift toward rich gas production, an MPLX sweet spot, further opens up capacity on existing pipelines.

Neal Dingmann asked if the planned rig counts for the Permian and Egypt are sufficient to maintain stable production and whether the company might pursue aggressive share buybacks given the current stock price.

Answer

CEO John Christmann confirmed the 8-rig Permian program is designed to sustain oil production around 130k bbl/d. In Egypt, he noted the 11 oil-focused rigs result in a slight gross production decline. CFO Stephen Riney added that a focus on waterflood management in Egypt could help mitigate this decline. Regarding buybacks, John Christmann acknowledged the attractive share price but stated the priority for asset sale proceeds is debt reduction.

Neal Dingmann inquired about Ring Energy's drilling inventory runway in years, the impact of vertical and horizontal drilling on extending it, and the differing perspectives on M&A opportunities between the Central Basin Platform and the Northwest Shelf.

Answer

CEO Paul McKinney acknowledged a shorter inventory runway (~450 opportunities) compared to larger peers, which drives their M&A focus. He noted the company is building its geoscience team for organic growth and is optimistic about future acquisition opportunities. EVP of Engineering and Corporate Strategy, Alexander Dyes, added that reduced D&C costs have improved the economics for both vertical and horizontal wells, making the investment landscape more robust.

Neal Dingmann inquired about Ring Energy's inventory depth, its capital allocation strategy between vertical and horizontal wells for the remainder of 2024 and into 2025, and the current landscape for conventional M&A opportunities.

Answer

Paul McKinney, Chairman and CEO, stated that the current capital allocation mix effectively maximizes cash flow and manages infrastructure constraints. He noted a handsome short-to-medium-term inventory but emphasized the need for acquisitions for long-term growth, highlighting a robust M&A market of non-core assets from larger operators. McKinney also mentioned the company is testing new ideas to organically grow its inventory. Alex Dyes, EVP of Engineering and Corporate Strategy, pointed to a presentation slide detailing the large scale of potential acquisition targets.

Inquired about the company's view on its stock valuation versus potential M&A opportunities, and whether there is room to expand their footprint in Equatorial Guinea.

Answer

The company views its stock as a great value, making share repurchases the preferred vehicle for returning capital, independent of M&A. While they monitor the M&A market, the bar for acquisitions is very high given their portfolio quality. In EG, they see expansion opportunities through regional gas aggregation, including from Cameroon, to maximize throughput at their LNG facility and extend its operational life.

Inquired about the specific drivers of the company's operational efficiencies and the rationale behind their capital allocation strategy, particularly the preference for share buybacks over variable dividends.

Answer

Operational efficiency is driven by strong well productivity, longer laterals, and modest deflation. The capital allocation strategy remains focused on a minimum 40% CFO return to shareholders, prioritizing share buybacks as a highly efficient tool for per-share growth, with excess cash going to debt reduction.

Neal Dingmann asked how the company balances capital expenditures with cash flow, questioning if the strong well results might prompt an acceleration of drilling or if they would maintain the strategy of slowing down. He also requested color on the recent decline in contract rig margins and the outlook for the current quarter.

Answer

Executive Frank Young stated that the company does not plan to run any more rigs for the remainder of the year and that future drilling will focus on the Marchand and Red Fork plays. Executive John Cromling explained that rig margins are expected to be 'virtually unchanged' in the next quarter because the BOSS rigs are under long-term contracts. He noted that while open market day rates are not increasing, they might improve margins by about 10% through cost trimming.

Neal Dingmann asked about the timeline for seeing a noticeable shift in the production mix towards a higher oil content. He also inquired about the potential for further bolt-on acquisitions in the Penn sands area and sought an outlook on rig operation margins for the upcoming quarter, including any potential termination fees.

Answer

Executive Frank Young responded that oil's share of production, currently 16.7%, is expected to increase significantly in Q3 and Q4, exceeding 20% by year-end. He also confirmed that the company has identified other bolt-on acreage opportunities and is in discussions for deals similar to those made in Q1. Executive John Cromling addressed rig margins, stating that day rates will likely decline if the overall land rig count continues to fall, as was seen with spot market rates in the first quarter.

Neal Dingmann asked for details on the production variability between the two recent Red Fork wells, the Schrock and the Frymire. He also inquired about the current bidding activity for BOSS rigs and the likelihood of deploying the 14th rig, assuming it would require a long-term contract.

Answer

Executive Frank Young explained that the production difference in the Red Fork wells was due to geological location; the Frymire well was drilled in a gassier part of an older field, while the Schrock was in a more oil-rich area, guided by data from previous vertical wells. Executive John Cromling noted the strong market reception for BOSS rigs and expressed confidence in securing a long-term contract for the 14th rig before its components are fully delivered and assembled.