Financial Data and Key Metrics Changes - The company reported oil production of 176,500 barrels per day, exceeding expectations, with total production at 385,000 barrels of oil equivalent per day [8][10] - Adjusted operating cash flow reached $817 million, while adjusted free cash flow was $312 million, with cash capital expenditures at $5 million [8][10] - The company maintained leverage at approximately one times and liquidity of about $3 billion [11][12] Business Line Data and Key Metrics Changes - The company executed a buyback program, repurchasing $43 million of shares at an average price of $10.52 per share [6] - The acquisition of Apache for approximately $600 million was completed, contributing about 900 barrels of oil per day to production [6][8] - The company added 1,300 net acres across 130 grassroots acquisitions in Q2, enhancing its development opportunities [9] Market Data and Key Metrics Changes - The company has entered into multiple new transportation and marketing agreements to optimize pricing for hydrocarbons, expecting to improve gas netbacks by over $0.10 per Mcf and crude netbacks by over $0.50 per barrel [13][14] - The company anticipates an incremental 75 million cubic feet per day of firm transport by year-end 2025, ramping to 450 million cubic feet per day by year-end 2028 [13][14] Company Strategy and Development Direction - The company aims to achieve investment grade status, recently receiving its first investment grade rating from Fitch, which is expected to enhance its financial flexibility [10][11] - The marketing strategy is evolving to focus on optimizing pricing and reducing costs, with a goal to sell a larger percentage of gas outside the basin [12][59] - The company is committed to countercyclical investments to deliver shareholder returns throughout market cycles [7][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate downturns due to its strong balance sheet and asset quality, emphasizing the importance of maintaining operational efficiency [39][40] - The company is cautious about future growth, indicating a preference for flattish to low single-digit growth in production due to market uncertainties [98] Other Important Information - The company highlighted the benefits of the One Big Beautiful Bill Act, which is expected to reduce taxes and regulatory burdens, enhancing investment incentives in domestic shale production [15][16] - The company is focused on maintaining a cash balance of $500 million to $1 billion to ensure liquidity during downturns [110] Q&A Session Summary Question: Can you provide insight into recent production performance? - Management noted strong well results and favorable weather conditions contributed to robust production performance [20][21] Question: How do you view the current landscape and future production guidance? - Management indicated a cautious approach, suggesting that production guidance will be adjusted based on macroeconomic conditions and commodity prices [24][25] Question: What impact do the new marketing agreements have on unit costs? - Management confirmed that there would be no immediate change to GP and T based on the new agreements, but they expect improved netbacks [29][30] Question: Is the company considering expanding its midstream presence? - Management stated that while they have evaluated options, they believe their upstream business offers better returns than midstream investments [33][34] Question: Can you elaborate on the downturn playbook? - Management emphasized the importance of a strong balance sheet and asset quality, stating that downturns can present investment opportunities [39][40] Question: What is the company's perspective on M&A activity? - Management views the company as a potential consolidator in the Delaware Basin, with a robust pipeline of acquisition opportunities [43][44] Question: How do you see the impact of federal land regulations? - Management noted that new regulations allow for more efficient operations in New Mexico, leading to capital savings [104][105] Question: What is the expected cash balance moving forward? - Management indicated a target cash balance of $500 million to $1 billion to maintain liquidity [110] Question: What are the expectations for ground game activity? - Management expects to continue strong ground game activity, particularly following the recent acquisition [112][113]