Good morning and welcome to Centennial Resource Development conference call to discuss its First Quarter 2022 earnings. Today's call is being recorded. A replay of the call will be accessible until May 12, 2022 by dialing 8558592056 and entering the conference ID number 3033538 or by visiting Centennial 's website at www.cdevinc.com.

At this time, I will turn the call over to Hays Mabry, Centennial 's Senior Director of Investor Relations, for some opening remarks. Please, go ahead..

Thank you, Willy. And thank you all for joining us on the company's first quarter earnings call. Presenting on the call today are Sean Smith, our Chief Executive Officer, George Glyphis, our Chief Financial Officer, and Matt Garrison, our Chief Operating Officer.

Yesterday, May 4th, we thought a Form 8-K with an earnings release reporting first quarter results, as well as operational results for the company. We also posted an earnings presentation to our website that we will reference during today's call. You can find the presentation on our website homepage, or under presentations at www.CDEVinc.com.com.

I would like to note that many of the comments during this earnings call are forward-looking statements that involve risks and uncertainties that could affect our actual results and some plans.

Many of these risks are beyond our control and are discussed in more detail in the risk factors in the forward-looking statements sections of our filings with the Securities and Exchange Commission, including our quarterly report on Form 10-K for the quarter ended March 31st, which will be filed with the SEC later this afternoon.

Although we believe the expectations expressed are based on reasonable assumptions, they are not guarantees of future performance and actual results or developments may differ materially. We may also refer to non-GAAP financial measures that help facilitate comparisons across periods and with our peers.

For any non-GAAP measure we use, a reconciliation to the nearest corresponding GAAP measure can be found in our earnings release or presentation, which are both available on our website. With that, I will turn the call over to Sean Smith, our CEO..

Thank you, Hays. Good morning and welcome to Centennial 's first-quarter earnings call. Overall, Q1 was a strong quarter and we are very pleased to have started the year off with robust financial and operational execution.

From a financial perspective, we generated record free cash flow that allowed us to fully repay all borrowings under our credit facility and build a significant amount of cash. This net debt reduction delivered leverage of 1.1 times at the end of the quarter, a level that is ahead of previous expectations.

Operationally, we continued to deliver from a technical perspective with strong well results from our Northern and Southern Delaware positions across a variety of zones. Additionally, we were able to deliver capital expenditures in line with our expectations despite completing six more wells than originally anticipated.

This dynamic underscores our operation team, focused on continued drilling and completion efficiencies, as well as continuing our quarterly success of drilling and completing wells ahead of schedule and under budget.

In my comments from the year-end 2021 call, which is highlighted on the Slide 5, I laid out a differentiated 2022 game plan that was predicated on three core principles. First, delivering meaningful, free cash flow generation and reducing leverage below one term. Second, targeting top-tier oil production growth of 10% to 15%.

And third, announcing and executing on our two year $350 million share repurchase program once we have achieved our leverage target.

As I look back at our execution in the first quarter, and look ahead to our expectations for the remainder of the year, we believe that these objectives are not only on track, but are ahead of schedule relative to our initial expectations.

From a growth perspective, we believe we are well-positioned to deliver on our targets based on our strong well performance and continued operational efficiencies to-date.

From a free cash flow and deleveraging perspective, we have made significant progress in Q1 and are raising our free cash flow target by $150 million, from greater than $400 million, to now greater than $550 million at today's strip.

Third, with our revolver fully repaid, meaningful free cash flow in the balance sheet, and leverage nearing our target levels, we look forward to commencing our Share Repurchase program in the near-term. All-in-all, Q1 was a very strong quarter, and I'm excited for our continued financial and operational execution of our 2022 game plan.

With that said, I'll turn it over to George to review our financial results..

Thank you, Sean. Turning to our financial and operating results on Slide 12 of the earnings presentation, overall Q1 results were in line with our expectations.

As we had previewed during our Q4 earnings call back in February, Q1 production levels declined quarter-over-quarter due to the shift to larger development packages in addition to the carryover of DUCs from Q4.

As a result, net oil production for the first quarter was approximately 32,750 barrels per day, while average net equivalent production totaled approximately 61,400 barrels per day.

Oil as a percentage of total production declined to 53% from 55% in Q4, due in part to the completion of six wells in the high GOR area of our Reeves County acreage, several of which were the highest rate of return wells in the quarter.

Despite lower production levels compared to Q4, total revenues increased by 10% quarter-over-quarter to almost 350 million as a result of higher oil and NGL prices. Overall, unit costs during Q1 came in with an expected ranges relative to full-year guidance.

Q1 LOE per barrel was slightly higher than Q4 due to elevated workover expense, but was still within our guidance range for the year. GP&T was slightly above expectations mainly because of higher than anticipated natural gas and NGL prices, which increased the expense associated with our percent of proceeds contracts.

As I mentioned on the last earnings call, Q1 is expected to be our lowest production quarter this year. And we expect our overall unit costs to decline in subsequent quarters as our production base increases.

We generated approximately $89 million of free cash flow during the quarter and used that cash flow to fully repay borrowings under our revolving credit facility and to build cash on hand. Adjusted EBITDAX totaled 217 million, which was up approximately 16% from Q4. Lastly, net income for Q1 totaled approximately $616 million. Excuse me.

Turning to CapEx during Q1 Centennial incurred approximately a 115 million of total capital expenditures for the quarter we spud 13 wells and completed 18 wells compared to 12 and 9 respectively in the prior quarter.

While Matt will touch on this further, it is important to note that as a result of efficiencies, we completed six more wells during the quarter than anticipated, but still posted CapEx in line with our original expectations.

This acceleration of well completions into Q1 coupled with over half of our Q1 wells being brought online during the last month of the quarter, set Centennial up for significant quarter-over-quarter production growth and strong free cash flow in Q2. On Slide 8, we summarize our capital structure, leverage and liquidity.

Total net debt decreased by 8% from year-end to approximately $765 million at March 31st, and net debt to LTM EBITDAX declined to 1.1 times compared to 1.4 times at year-end. The significant improvement in our balance sheet and strong outlook resulted in one notch upgrades from both Moody 's and S&P.

At March 31st, revolver borrowings were zero providing us nearly full access to the $750 million of elected commitments under the credit facility. Additionally, we had approximately $51 million of cash-on-hand which we expect will build over time.

Finally, with our first note maturities scheduled for early 2026, Centennial has significant financial flexibility going forward. Turning to our share repurchase, I'd like to reiterate a few points we covered on the last earnings call.

First, we have the free cash flow profile and balance sheet to return a significant amount of capital to our shareholders. In fact, our $350 million program represents approximately 15% of our market capitalization.

Second, we expect the Share Repurchase program to be accretive to our long-term shareholders as it delivers higher per share ownership of production and cash flow as the plan is executed over time. With an already differentiated production growth profile, Share Repurchases can enhance our already strong metrics on a per share basis.

In addition, the share repurchase provides flexibility to drive value over time. Our strategy will allow for both regularly timed buybacks, as well as opportunistic repurchases during periods of market dislocation. As time progresses and we build and execution track record.

We are likely to revisit the size and duration of the current program in addition to evaluating potential additional return of capital options. With respect to execution, we have previously communicated our intent to begin repurchasing shares when leverage fell below one times.

With March 31st leverage at 1.1 times and strong anticipated free cash flow in Q1, we look forward to beginning to repurchase shares in the near term. With that, I'll turn the call over to Matt to review operations..

Thank you, George. Q1 was an outstanding quarter with the operations group, as we continue to build upon the significant operational efficiencies gained last year with incremental improvements to completion cycle times.

We have also made the shift to larger packages of 4-6 well development projects to capture additional efficiencies via economies of scale. We see the utilization of larger development units and the usage of shared facilities as key drivers of capital efficiency going forward.

Staying on this topic, on Slide 6, as we first mentioned during our Q3 call last year, our operations team began testing a new completions design which utilizes less fluid, resulting in shorten pump times and additional cost savings.

As you can see on the slide, we've driven a step change in our completion cycle times, increasing both stages per day and lateral feet completed per day by 17% and 32% respectively, when compared to Q1 2021.

Most importantly, since we began pumping this new design late last year, we've seen strong initial production results, as essentially every well utilizing this design has been at or above our original expectations..

As George alluded to, these completions efficiencies were the primary driver of us completing six additional wells during the quarter, and places Centennial on a strong footing for the start of the year.

On the drilling front, our team continues to carry over the efficiency gains from last year, which has been driven by larger pad developments and reduced mobilization times.

Additionally, we recently drilled our longest lateral in the company history, the Challenger AC 32H, which reached total depth in just under 16 days for a 2.5 mile lateral, or approximately 24,000 feet of total debt.

For reference, our previous data point for a 2.5 mile lateral in reach county was the Dot Gardner AU 23H, which drilled to a total depth of approximately 23 thousand feet in 44 days back in 2018. This really puts into perspective, in my opinion, and demonstrates the material step change in performance from our drilling group.

It is important to note that our team has not stopped at the drilling and completions process to drive efficiencies into the program or cut costs.

Shifting to the bottom right-hand side of Slide 6, we began implementing centralized tank batteries in our development program during 2018, and continue to increase the percentage of our development program utilizing this new facility design.

Once built, these centralized tank batteries are easily expandable to accommodate additional nearby wells and can do so at significantly lower costs than new build facilities. For 2022, we expect that roughly 60% of our new wells will flow into existing expandable facilities. A significant uplift compared to previous years.

Finally, we will be evaluating the potential to retire some of our legacy facilities over time and flow those wells into nearby newer facilities with expandable capabilities. This will have a positive impact on our LOE. Overall, our operations department is constantly innovating from a technology standpoint to drive further efficiencies.

The team's continued focus on innovation and efficiency will be particularly critical as we look to help offset some of the inflationary pressures, we continue to see in 2022. Now, turning to our recent well results on Slide 7.

In Reeves County, Texas, the powder doughnut wells came online in our Miramar block, which as many of you know, is the higher GOR portion of our Texas asset. This four well, development consisted of laterals in the third Bone Spring sand, Wolfcamp A and Wolfcamp C, with average lateral lengths of almost 10,000 feet.

The pad delivered an average IP30 of over 2400 BOE per day per well, with a 42% oil cut, or approximately 1,000 barrels of oil per day per well. Notably, the maximum IP 24-hour rate for the four well pad was over 41 million cubic feet of natural gas per day. These wells represent our highest rate of return projects for the quarter.

And we expect this development on average to payout and roughly three months. These are outstanding results from our team and a testament to their advanced planning and operational flexibility. As we accelerated the development of this pad, given the recent strength of natural gas prices.

Furthermore, the powder doughnut wells represent another solid infill results from the third Bone Spring and Wolfcamp C. Further bolstering our confidence in our remaining inventory across the Texas acreage position. In New Mexico, we completed two separate six-well developments during the quarter, both targeting the second Bone Spring sand interval.

In the central portion of our Lee County position, the Chimichanga and Caso Blanca wells were drilled as a six-well development with approximately 8,400 foot average lateral lengths. These wells generated robust results, averaging IP30 of over 2100 boe per day, or approximately 1,800 barrels a day of oil.

Further south in the New Mexico acreage position, the Pac-Man and Donkey Kong wells represent another six well development..

This time utilizing a staggered pattern in the upper and lower portions of the second Bone Spring sand with approximately 8500 foot average lateral lengths. Like the Chimichanga and the CAISO package, production numbers were strong, posting IP30 numbers of approximately 1750 BOE per day, or over 1400 barrels a day of oil.

Overall, our team did a tremendous job during the first quarter and brought online some outstanding wells. More specifically, we estimate that all our wells brought online during the quarter will achieve payout in approximately four months assuming the current strip prices.

The well results this quarter continued to demonstrate the high quality of both of our assets. Lastly, I'd like to finish up reviewing our outlook for natural gas takeaway in house Centennial plans to navigate the potential headwinds.

Depending on future Permian production growth, we do believe that natural gas aggress out of the basin could become tight in future periods until a new pipeline is built.

As such, we have been evaluating and are close to executing multiple term sales contracts, which would provide transportation for essentially all our expected gross revenue residue gas in the near term out of the Permian Basin during these expected periods of tightness.

Overall, our objectives are to maintain flow assurance for all product streams at a low transportation cost without entering into long-term contracts. Given where we are in these discussions, we feel very good about our ability to execute on these agreements over the next few months and look forward to discussing in more detail on future calls.

As you can see, our operations team is firing on all cylinders and doing an excellent job navigating the current oilfield service environment. While we continue to focus on driving further efficiencies, in an effort to partially offset inflation, we are also very mindful to avoid any material delays or lost time to our operations.

In light of the current oilfield supply chain challenges, our team has been very focused on sourcing the necessary equipment well in advance of the anticipated schedule. We also worked diligently to keep good lines of communication with our service providers so that Centennial can continue to efficiently develop our acreage on time.

Year-to-date, we have not experienced delays or procurement issues primarily due to our team's efforts on both the planning and execution fronts. Overall, this is a strong start to the year from our operations team and we look forward to building upon this performance going forward. With that, I'll hand the call back to Sean..

Thanks, Matt. In closing, we are very pleased with our execution in the first quarter and excited about the go-forward game plan for Centennial.

We have put the company in position to continue to generate significant and sustainable free cash flow with a balance sheet that is resilient to commodity price volatility and and provides financial flexibility. We continue to have a differentiated growth profile supported by our high-quality assets in the premier U.S.

oil basin and operations team with a proven track record and inventory depth that will allow us to continue to execute our game plan.

These factors will allow Centennial to embark on the next chapter of our company with a focus on shareholder returns, which we expect to commence in the near-term and have a has us well-positioned to succeed for the remainder of 2022 and beyond. Thanks for listening and now we'll go to Q&A..

Thank you. The question-and-answer session will be conducted electronically. If you'd like to ask a question, One moment please for our first question. Your first question comes from the line of Neal Dingmann from Truist Securities. Your line is open..

Morning all, it's Jordan Levy on for Neal Dingmann. First, just wanted to compare the two lead developments you brought on this quarter. Both seemed like really strong results, both six-well developments, one kind of in that staggered pattern.

I'm curious how you think about the comparative economics and performance versus your expectations, and each of those developments given their kind of relative same zip code..

Sure. I'll take that. We've been very pleased. The second Bone Spring sand in New Mexico has been kind of a bread and butter target for us for a while. And we have been very pleased with both stack stagger programs that we've been working in the upper end, lower second Bone Spring sand.

As well as some of the in-zone tests of the lower second Bone Spring sand. One of the things we've been very pleased with this year by virtue of the larger development units is the increase in percentage of parent wells relative to child wells as we move in and execute offset wells in the larger package of wells at one time.

In past years where we were doing one or two wells, or maybe smaller groupings, a higher percentage of our new wells brought online were subject to some of the depletion effects that we saw from prior producers.

What we've seen in the shift so far is that the percentage of child wells in any incremental development unit dropped significantly and we enjoyed more parent-like production from the offset well.

Relative to our internal expectations, these wells are performing right on par with what we expected them to and the costs coming in right where we needed to come in relative to these expectations.

Thanks for that. And then second, I know you mentioned you had experienced -- you hadn't experienced any delays or cost overruns, which is great to hear.

Just want to get a sense of you -- in the current service environment, what you are seeing, whether internally or in talks with your neighbors, whether from a workforce perspective or a cost perspective?.

Sure. What we're seeing, primarily, the highest ticket items on any given well, really are related to steel pricing and fuel pricing. And so we see those has the dominant drivers of inflationary pressure. But what we do is, we procure -- we order that steel, we order the casing and the tubulars 2 quarters at a minimum, in advance of the program.

And we really have been committed to our contractors, as well as the rigs. We have not had any material changes in terms of rig cadence or number of rigs that we contract at any given time. So we've been able to manage that schedule pretty far in advance and try to negotiate pricing and things like that.

What -- we have heard people waiting on a lot of time with sand delivery relative to completions and things like that.

But with our vendors, in our lead times that we put out there, we've just not been able to -- we've not had any those kind of delays relative to our operations, and we're very proud of that working relationship with our vendors and our folks in the field with the long-term planning..

That's great to hear. Thanks so much..

Thanks, Jordan..

The next question comes from the line of Davis Petros from RBC Capital Markets. Your line is open..

Good morning you all. Thanks for taking my questions. And I guess firstly, just piggybacking on that last point.

Is there any updated thoughts on when you guys can maybe look to add a third rig or even if that's a consideration at this point, just given the long kind of procurement lead time on securing those supplies?.

Yeah, I appreciate that question, Davis. I'll take that one. As we look at our program, I will say that, I think Matt described it very well.

We haven't seen any delays or issues with procurement because of our advanced planning and our current 2 rig program, it does provide significant growth on a year-over-year basis, differentiated from most of our peers. I would say to the tune of 10% to 15%.

So as we think about growing the business, we're going to do so within our own current operations and don't have a necessary and need to add a third rig to provide additional growth. So we're already doing that with our existing program.

Should we want to add a third rig in the future because prices remain strong down the road, we could make that decision. I do think there is a fair amount of lead time that you would need to put in place.

But again, I'll reemphasize that our two-rig program to-date provides the growth that others may need to add a rig to accomplish, so pleased with what we have in our plan going forward..

Got it. Yeah, that makes sense. Definitely a good program.

And I guess maybe just a quick follow-up on that and maybe getting a little nuance, is you think maybe early 2023 thoughts at this time is the third rig a consideration or is that kind of a -- to be determined at a later date?.

Yes. I think that is a to-be-determined at a later date. As we think about commodity prices in the flexibility of what's going on relative to the macro situation out there, whether it's China or Russia, or OPEC, there's a lot of factors that come into play. I am a believer in where commodity prices are today.

I think it's sustainable system around where we are right now. That being said, we're not looking into 2023 yet to provide additional guidance. What we are going to focus on is growing our business, our production, as it stands right now at tend to 15% year-over-year so that's where we're focused on.

That's we're going to execute and look forward to giving further 2023 guidance in coming quarters, if you will..

Got it. All right. And just one last question, is there any updated thoughts on how quick that buyback pace could be out of the gates. I think you should reach your leveraged truck at this quarter. Just wondering given the free cash flow outlook that you'll increase for this year.

Realistically, could you exhaust that at year-end or early next year, or is there any more color on that you can provide at this time?.

I think -- It's a good question, particularly as we look at our cash flow. As you heard probably in my prepared remarks, we are increasing our free cash flow this year up from an estimated $400 million to greater than $550 million.

So your point is valid as we think about that, but I will say that we are -- we've yet to begin the execution of that share buyback program. So look forward to beginning that in the near term and executing against that.

And as we get towards the point where we are exhausting that share repurchase program, I do think there's additional opportunity to be incremental to that down the road..

Got it. Thanks for taking the questions..

Thanks, Davis..

Thank you. The next question comes from the line of Zach Parham from J.P. Morgan. Your line is open..

Hey guys, thanks for taking my question. I guess first, just an operational one. You'll continue to drill and complete wells faster.

As we get into the back half of the year, if these efficiencies continued, how do you think about the capital program? Would you consider raise in the budget a little bit to potentially drive more turn-in-lines and maybe a bit more growth in '23 or would you take a holiday kind of -- are you thinking about managing that in the back half?.

Thanks, Jack. I think that, first of all, it's a compliment to our operations team that we have been ahead of schedule. I would say significantly ahead of schedule bringing on six more wells to this quarter than originally anticipated, and that's really an operational efficiency improvement.

And should that continue throughout the rest of the year, I think it will be towards the high side of our estimated completed wells for the year, which then of course translate likely to a towards the high-end of our capital budget.

That being said, at this point, we're not moving our ranges, our guidance for capital I do think that there's an opportunity there to have flexibility at the end of the year, whether that is pushing completions in the next year, some of that will depend on commodity prices right now. I'm a fan of completing wells and these commodity prices.

And so not building a significant DUC inventory. That being said, there's a lot of things that can happen between now and the end of the year. So flexibility is key for us. But again with the efficiencies we've driven out of field, we've got some real options down the road as to how many wells we're going to complete.

But that gives you some thought process and indication of where we can go by the end of the year. I hope that's helpful..

Yeah, that's great color. Certainly a good problem to have. I guess just one follow-up on the buyback.

You've talked about getting started on that near-term, so should we expect that you'll be repurchasing shares in 2Q? And if so, can you talk about potentially how aggressive you would be or how much free cash flow you would dedicate to cash returns in the near-term?.

Yeah. We a -- we're very specific, I guess, in what we provided last quarter on leverage targets and whatnot before executing. As you probably heard and saw from the release, our quarter ended at 1.1 times and we had been very specific of reaching a leverage target of less than one times before initiating our share buyback program.

And that program is kind of -- two different ways of executing that; regularly time buybacks as well as opportunistic repurchases. So we will be executing that in the near term and we're in the position to do that, but I can't be more specific as to when will be in the market. It doesn't make sense for us to release that information at this point..

All right. Thanks, guys. Appreciate the color..

Thanks, Zach..

And the next question comes from the line of John Annis from Stifel. Your line is open..

Good morning, you all. With the current commodity price environment driving inflationary pressures for the entire industry. I just first wanted to complement you on holding the line on CapEx.

My first question, just building off of the previous questions on inflation, could you speak broadly to the percent of remaining 2022 spend where you have locked in pricing supply needed to execute your program?.

Yeah, I can talk about that a little bit. Without revealing much in the way of the specifics around what we have or haven't locked in. I would say generally, what we've sought to try to -- try to do is lock in portions of our sand in terms of fixed price costs. So we've been able to kind of work one deal currently.

We've got about 50% of our sand termed up in a comfortable contract that we feel is competitive and below spot pricing.

The other thing we try to do, as I said in an earlier Q&A question is, we try to order our steel far enough in advance for tubulars and things like that, that we can accommodate the delays in terms of the production timing for steel costs. And when you do that, there's portions of that you can lock-in in terms of costs as well.

And at this time, based on what we can see, we don't anticipate seeing additional inflation relative to our steel pricing for the remainder of the year just by virtue of what we've been able to work through so far. And then lastly, the rigs are going to be termed up in there and they're finished through the rest of the year.

We don't anticipate incremental contractual increases in rates. We've already been through that with these two rigs and we've had these these two rigs in our service now for almost two years. And so we feel very good about where we are with those rigs and that vendor, as well as like I said, the sand and the steel..

That's great. I appreciate the color. For my follow up with the understanding that you have 15 years of quality inventory, I was highlighted by some strong wells this quarter.

I wanted to ask how you see Centennial playing a role in industry consolidation and your views on the market today?.

We continue to look for opportunities. I said we have a very active deal team. I doubt that there has been anything that's gone on the Delaware basin that we haven't at least been part of from a review point-of-view.

I would say that we had very high standards because of that 15 year inventory, we're not out to fill a void from an inventory perspective, we are looking for opportunities that are accretive across a number of fronts. Has be accretive financially, but also from an inventory perspective, they don't have to compete for capital in the near term.

And so as we look at those opportunities, there -- they had to be very specific in what they would add to our company going forward. I do remain focused on trying to grow the company, both organically as well as inorganically. But we've got very specific needs, qualifiers, if you will, on adding any other opportunities to our existing base.

I don't want to do is dilute the shareholders relative to inventory quality and certainly not from a cash flow per share basis or anything like that. So it's a very specific set of needs that any assets and or companies would need to qualify for us to add it to our existing position..

That's great. Thanks for the time..

Thank you. Appreciated..

We have a follow-up questions from Davis Petros, from RBC Capital Markets. Your line is open..

Thank you. Appreciate you had me back into the queue. Just one last question, you-all said GAAP tax rate this quarter, I think it was around 30%.

Can you keep providing anymore color on how we should think about that going forward, either for the rest of the year into '23 and then as well as an updated cash tax horizon?.

Sure. Good morning, Davis. It's George. What I'd say with respect to the rate you saw this quarter, that was a one-time true-up related to a state apportionment rate, which gets a little bit complicated. I'll just leave it at that on why that 31% occurred. You're not likely to see that rate going forward. It should be much lower, at least in Q2.

I think from a tax standpoint overall, the first thing I'd say, it's fairly remarkable that we're discussing cash taxes so broadly within the industry, that's my first observation. But with respect to CDEV specifically, we're very fortunate to have a significant federal NOL position.

And if you dig through our 10-K, you'll note that it's approximately 500 million at year-end 2021. So we came in -- into the year with a very meaningful tax yield. As we look at the current business plan, activity levels, commodity environment, we believe we're a couple of years away from fully utilizing those NOL's and being a federal cash taxpayer.

So to summarize, we're in a relatively -- relatively well-positioned, not to have any material cash tax liabilities in the near term..

Got it. So just to clarify, to make sure I'm thinking about it correctly, took you on where it's that book tax rate probably going to be closer to peers around 20% to 25%.

Something like that, correct? And then cash taxes though probably maybe 24 beyond, is that the right way to summarize that?.

I think that's directionally okay way of thinking about it. I don't want to specify a specific percentage. It will be below 31% on the book tax..

Got it. Appreciate the time..

Thank you. And we have reached the end of our Q&A session. I would now like to hand the conference over to our CEO, Mr. Sean Smith for the closing remarks..

Thank you I can say is that I'm very pleased with how the company is positioned. We have a bulletproof balance sheet, meaningful production growth, significant and sustainable free cash flow and a robust shareholder return program that's been board approved. I believe that all of these trades are going to drive substantial value for our shareholders.

And I look forward to the upcoming quarters. Thank you for listening today. And with that I will end the call..

Thank you, ladies and gentlemen. This concludes today's conference call. Thank you for participating. You may now disconnect..