Coterra Energy Inc. (CTRA) Earnings Call Transcript & Summary

So our next session -- Tom wasn't here to hear our introduction this morning. So Tom, basically, President and CEO of Coterra Energy, obviously, one of the few consolidation stories over the last couple of years. And obviously, part of the thesis that Tom put together was to balance commodity exposure across the portfolio. So we're really curious to hear Tom's response to our [ real ] issue natural gas, which you didn't get to hear this morning. So joining Tom, today, we have Blake Sirgo, who is Senior Vice President of Operations, I think, recently moved into that position, Blake, if I'm not mistaken?

Yes.

And John Abbott, who works with me on the gas-weighted names at Bank of America. So, guys, thanks for being here. I expect we'll have additional folks moving in. But Tom, maybe I could just give you the floor to kick off with a few high-level comments, and then we'll get into our questions, if that's okay? How we see the world, sort of state of the union for Coterra currently after...

No -- well, I appreciate the opportunity. We're probably all getting tired of saying it's an interesting world in the last few years. It seems like that's been the mantra, but it's an interesting world. And it's been really interesting for us at Coterra to see the evolving conversation around energy security, energy affordability and also climate action. And all of that, I think, is a strong support of natural gas constructive story. We also have tremendous oil assets. And of course, all markets have firmed up. I think generally, the story of '22 that I'll take away is that I think there's a growing and firm understanding that our industry is required for the energy transition and will be around for decades to come. And Coterra is really well positioned from an asset standpoint, and love to talk about that further. We have a very low cost of supply and tremendous assets and great organizations. So we're really hitting our stride and quite pleased to be here. So thank you, Doug.

Well, Tom, I'm delighted to have you guys here. I want to kick off with kind of a high -- a couple of high-level questions. So the industry got kind of vilified for spending too much capital, generically, the whole industry, growing at too fast a rate, subsidized by Saudi Aramco, who was actually our keynote speaker at lunch. I don't know if you got a chance to listen. But it seems that -- now we've got Saudi reengaging the government to support the oil price and the U.S. government calling on more investment. Do you see any reason to change strategy back to some level of appropriate growth, whatever that may be?

Well, the industry pivoted, as you well know, into essentially maintenance mode or low-growth mode where we behave like a manufacturer. We were -- the call on us was, look, you say these assets are repeatable, so just go into repetition mode and return cash to our owners as any good manufacturer. But we didn't -- and the industry has broadly adopted that as has Coterra. And I hope from our behavior in the last 4 or 5 quarters, you've seen we're serious about it, and we have the wherewithal to sustain it and even grow it as we did in the third quarter. That said, we didn't get here in a vacuum. We got here because of investor cries for that changed behavior. And we wake up every day -- one of the things I've said for years is that flexibility is the coin of the realm. And we have a tremendous optionality at Coterra. We have low debt, top-tier assets and great organizational capacity. And to your point, Doug, I will not be surprised if the call changes and that investors sell-side broadly starts calling on us to grow modestly because of the challenges of not only America's energy security but global energy security. We're listening to our investors on that. Coterra has the wherewithal to respond to that call if and when it comes. But until that call, we're going to hold that discipline of low to moderate growth and generate free cash flow and return to our owners.

Well, let's maybe explore that a little bit because the idea of going back to -- and I'm not -- don't get me wrong, I'm not calling for the industry to go back to the -- you know my expression, the DCF of 0 is not a big number. That kind of defined for us everything that was wrong with that strategy at the time for the industry. But there are different challenges today. If you wanted to add a rig, if you wanted to increase capital, you're already seeing capital pressures from an inflation standpoint. So can you walk us through to what extent is capital going up anyway without any incremental activity? And obviously, you're diversified across your portfolio, so you have perhaps less exposure to some. What are you experiencing in terms of where those constraints exist today?

Well, I'm going let Blake handle that.

Yes. Unfortunately, inflation is still alive and well in the oilfield. We're feeling it all throughout '22. And as we look ahead to '23, the contracts we're entering into show that. Right now, we're estimating 10% to 20% increase next year.

Is that year-over-year or exit-to-exit?

Year-over-year. But there's a lot of noise in that. There's contracts that span the year, earlier, lower versus new ones. There's changes in lateral length, there's projects that span multiyear. So you're going to have different costs. And right now, we're at the low end of that range. But if inflation runs in '23 like it did in '22, we could be pushing the...

That's a portfolio average, I assume.

Yes. That's Coterra...

So how is it bifurcated between your 3 basins?

It's a little different, but not terribly. We see inflation everywhere. Tom always says that everything has wheels, and that's exactly right. Those rigs and crews know how to sniff out the best margin, so they tend to move around. We see a little higher inflation in the Marcellus, and a lot of that is due to all the winterization needed. And it's just a smaller pool of players, less people that bid.

That's the opposite of what I would have thought. That's really interesting. We're going to have another -- a few of your Marcellus peers over the course of the afternoon. So we'll maybe use that as I hope to explore that. Tom, I hate to hit the 800-pound gorilla in the room, but it wouldn't be -- it'd be inappropriate if we didn't. The other constraint, of course, on growth of any type is inventory depth. And I know you've said to me many, many times, it's one thing you don't lose sleep over. But then we get the reserve write-down in the third quarter. So can you walk us -- can you help us reconcile reserve depth, resource debt portfolio integrity against that decision to take...

No. Look, Doug, I really appreciate and welcome that question. I'll say, reserve depth and inventory depth are 2 totally different things, and they're decoupled completely. The reserve revision was a very difficult decision for us, but it was, I think, the right decision to do. Not only was it, I think, in the best interest of Coterra long term, but we -- once we had certainty of it, we wanted to disclose it as soon as we could because it's significant. We don't think it's financially material. We talked about that. It has very little impact on our financials. It's also something that was a long time coming. I'll just say this. In forming Coterra, we had seen this phenomena coming in. When we started at Coterra and brought our teams together, we had them start to look at this. But it really wasn't until our look-back process that we completed in the third quarter that we saw the systemic -- quite frankly, the forecast on these wells were a little aggressive compared to the performance of the wells. And this was no secret. It's all public data. I mean anybody could pull down production. That said, our Marcellus assets are among the most productive in the basin, full stop. These are revisions that were an outcome of going to predominantly infill drilling, where you had neighbors on both sides of the wells. And as the program from 2017 forward went to predominantly infill, it required a little different forecast parameter. But it took some time to observe that, quite frankly. You really don't see much of a divergence between our new forecast and the old one in the first 5 years of production before you see any significant divergence. But our look-back process, which goes back decades, really illuminated that. Certainly, looking back to 2017, illuminated that. It's a bigger impact on reserves than go-forward. For a new well, it has about a 15% reduction, mid-teens, I'll say, in full life reserve, spread over a 50-year life. It has single-digit net present value and almost immaterial rate of return or PVI. That said, we feel like it was a change we had to make. It makes Coterra a better company. The other thing that surprised people is how can we revise our reserves and say it has no impact on our cash flow? Well, the reason is, historically -- and look, we were -- analyzing the Marcellus going into this, we had that same question. We observed that the production was below type curve, and we said, how in the world can that Cabot team be so good at hitting their guidance? Well, the reason for that is because reserves were never the basis of a cash flow or production projection. In our Pittsburgh office, we look at -- there's a system in that Susquehanna County, Pennsylvania asset that takes into account line pressure, compression, subsurface conditions. And we have a very sophisticated reservoir model with a surface hydraulic model that is the basis for our production forecast and our cash flow forecast. It's history matched to historical production. It's very well grounded. And by the time our program comes out of that model, which includes the subsurface and the surface operating conditions, it generates a production forecast and a cash flow forecast, which was never tied one-for-one with the reserve forecast. And so that's what we've been running Coterra on, is that model. It's the right approach. And this approach that we took with our reserve revision just sort of heals a little bit of that. It makes us a better company because in capital allocation, we want everything to tie, quite frankly. We just want everything to tie. And again, it's not financially material. But look, we, obviously, took it seriously because we announced it a quarter earlier than our normal end of year reserve process and felt the responsibility to do so.

I'm curious, I mean, your -- you've got a storied reputation on delivery at legacy Cimarex. Was this a different view of the due diligence, if you like, on the asset? Is this a different view taken by the legacy Cimarex team versus the way it was viewed by Cabot? I guess what I'm really trying to ask is, how much of this was a surprise to you? How would that have changed your view of the acquisition, if at all?

None of it was a surprise, and it was modeled into the acquisition.

It was modeled into...

Yes. Now, if you look at our S4, you'll see technically adjusted numbers. Now this was -- did we have rock-solid, take-it-to-the-bank certainty? Of course, not. But we had enough of an indication to model it into our numbers pre-Coterra. It was once we formed Coterra that we put a multidisciplinary team together that included a lot of legacy Marcellus engineers that went at it, we went out from a lot of different angles. And we didn't have the certainty to pull the trigger on it until the third quarter when we could complete that work. But what we announced in the third quarter was fairly consistent with our viewpoint early spring of 2021. We just didn't have -- we hadn't square that circle to act on.

But it was risk at the time of the...

Yes. Yes.

Okay. So as we look at the go-forward drilling inventory, because sustainable inventory life as you know is kind of a key thing as to how we think about value. There seems to be a misconception between the quality of your Upper and Lower Marcellus relative to -- Chesapeake got in front of you, I guess, and talked about 70% less productivity and interference between the 2 zones and lower pressure gradings and so on. How would you define how this has changed your view of the inventory depth?

It hasn't changed at all. The only thing we lost -- the PUD revision was because of the SEC 5-year rule. And about 60% or more of that PUD revision were wells that were not going to be drilled within the 5-year rule time frame. Those wells went back into our inventory. Now there was a revision as we up-spaced to 1,000-foot spacing. We lost some locations in doing that. It's a good thing. We increased our capital efficiency. We increased our financial productivity, but when you up-space, you lose locations. So some of those PUDs, I don't know the exact percentage, but let's say 40% were because we had lost the locations, either by going from 800 to 1,000 feet in the Upper -- in the Lower Marcellus, excuse me, or as we have in other basins, we looked at wells that were adjacent to parent wells and said, let's just drop that location because of the interference phenomenon. Now as far as the interaction between the Upper and Lower Marcellus, there is a fair amount of geological variability in the Marcellus. And I'll speak about our assets at Coterra, and what I'm about to say, isn't necessarily true as you go further East or West. The Purcell is upwards of 50 feet thick over the bulk of our asset. The Purcell Limestone separates the Upper Marcellus from Lower Marcellus. And we have plenty of tests, most recently the Dobro test that we announced in our third quarter, where we had 7 Upper Marcellus wells sitting on top of 11 Lower Marcellus wells that had already produced 170 -- or 172 Bcf -- it's either 172 or 127, it's one of those two, but a lot of volume, and we saw no interaction. It was -- one well in the program had minor interaction on frac, but none on production. So we have lots of tests around our asset that tells us that, that Purcell is a frac barrier and the Upper and Lower will be developed independently without interference. That's not true broadly as you go further west of us, it behaves like one petroleum system hydraulically. That's not true in subsequent -- where we're operating.

So I think we just got the sound bite from this session then. So to be clear, the well test and -- the 7-well test in the Upper Marcellus was nothing to do with the reserve revision?

Absolutely not.

I don't think that was a perception in the market.

How would they be linked?

I think there was an expectation that the reserve revision was somehow speaking to, I think, perceived degradation of the...

No, no, no. Absolutely, no. I mean that's the first time I've heard that.

Yes. And I think that's something that comes from feedback we had. I think that is a misconception...

Well, I'm surprised you say that because our Upper Marcellus result, I think, was better than many people had expected.

Right, right.

It was about in line with our expectations, but it was a stunningly good result.

Which is why I think you had that line of question on the earnings call. But John has been sitting very patiently. John, I know you wanted to jump in on a couple of things. So do you want to take that for...

Yes, sure. So I want to switch gears to the Mid-Con. So you've been doing some tests out there, and part of these tests here are going to determine potentially how much capital that you allocate towards the Mid-Con. And so I just sort of want to think about strategically how the Mid-Con fits within your portfolio. So if you don't allocate more capital to the play next year, is it still valuable to hold it longer term because it is more gassy? And if you have -- we've had other discussions here where maybe 2023 and 2024 may be a little bit softer for the gas market, but your Mid-Con position does have gas and you are relatively closer to the Gulf of Mexico. Does it have optionality? So even if you don't get the capital allocation, is it worth holding on to it longer?

Well, thank you for that question. We really like our Mid-Continent assets. And the fact that they are currently out of favor has been a great opportunity for us because we've been able to core up some things, execute some trades and build up a really nice inventory of 2-mile long wells. And that's because some of the competitors we have, I think, it went a little fallow in people's portfolio. Look, the Mid-Continent is top tier without question, it's top tier. In fact, some of the programs we're flowing back now are -- really look forward to talking about them in more detail because they're pretty eye-opening. The problem is that they have some family members that are really fantastic. I'd say in our portfolio, certainly, the Permian and Marcellus are neck and neck at the top of our portfolio. The Mid-Continents in the upper tier, but it's a notch below the Permian and Marcellus. And that's not about well productivity, it's really about netbacks and received price in the Mid-Continent. But as we think about Coterra, many of our peers are talking about capital degradation, Tier 1 inventory being depleted. And we don't see that as a meaningful risk to Coterra, certainly within the next decade. We've got a really deep inventory of what we think are top-tier locations. But -- and those of you that know us, I won't surprise you by saying we think of Coterra in decades, not years. And we think about, all right, what -- how are we going to position ourselves for the challenges ahead? And look, if we said everything has to compete for a marginal dollar today, there'd be a very short conversation on assets because very little can compete with our current inventory. The Anadarko, not only is it currently being developed, it's not getting as much capital as the Permian, Marcellus, but it's tremendous optionality in our portfolio. We have about $2 billion of future investment potential of outstanding opportunities, and we like having that as a safety valve in our portfolio. I mean from time to time, there have been concerns about Marcellus, concerns about Permian. They are fantastic opportunities. Quite frankly, I think they're more valuable sitting in our portfolio than they would be if we tried to monetize them. They generate great cash flow, low operating costs. And we're a multi-basin company, it's not a distraction to have these assets. They are tremendous assets.

So I have one follow-up question on that, and then I will turn it back to Doug here. So the optionality here -- and again, if I'm sort of thinking about gas, longer term. Could you just sort of explain -- like so we can look at the Permian and we can look at the takeaway there, we can understand the takeaway about the Haynesville. But could you just sort of go back, and what's the ability to grow gas longer term from the Anadarko basin if LNG becomes more important over time?

Yes. Blake, why don't you handle that?

Yes. The Anadarko definitely has less constraints on it. It's down quite a bit from its all-time highs, and there's not as much gas from the north flowing through there as there used to be. So it's -- there's capacity on those pipes. We can get to the Gulf Coast pretty quickly, pretty easily, so that's the optionality we like. There's things we can make happen there a lot quicker than we can make happen in other basins.

Appreciate it. Back to you, Doug.

So we are -- we kicked this session off by saying -- we've completely reset, I've completely reset my view on U.S. natural gas after 10 years as a permabear, to be perfectly honest. I'm being very candid. And we weren't crazy about Cabot because we had a negative view on gas, and it was a pure-play gas stock. So the world has changed a lot. How does that change -- I guess it's jumping on John's question, to some extent. How does it change your view of capital allocation when obviously, there's still question marks over oil growth? But gas growth has got its own challenges going into '23, '24, but '25 through '30, potentially a whole different structural outlook. So how does your portfolio adapt in terms of how you allocate capital into that backdrop?

Yes. Well, look, we're delighted to have the portfolio we have, and it's been really nice, quite frankly, since we formed Coterra, to see the changed conversation on natural gas. Certainly, we took great advantage over the gas prices of 2022. And yes, I was at a Federal Reserve conference last week, an energy conference put on by the Dallas and Kansas City Fed. It's one I've attended for a few years, and it's just wonderful food for thought. And there were economists there saying that 5 is the new 3 on gas price, looking ahead and global economists talking about the need for natural gas, the need for U.S. natural gas and the underinvestment in our sector and what that will mean in terms of price recovery. We love the way we're positioned. We have tremendous oil assets and tremendous gas assets. And when I say gas assets, it's not just in the Marcellus. The Delaware Basin, I think, is going to surprise people with the gas supply it can generate. It won't have the cost of supply of the Marcellus because the Permian implicitly, the Delaware implicitly, because of the water handling, has a higher operating cost. But we are well positioned for what we see as a very, very constructive gas price. We're still going to be in the weather business for the next year. But in 2024, I think we're going to see some markets open up that are going to lead to a big call on U.S. gas, and we're going to be ready.

And one of the questions -- and Joe wanted to jump in here, you might be heading in the same direction. One of the questions we get a lot is takeaway as it relates to your gas situation, particularly in the Delaware. I think you already addressed the Anadarko, but can you just hit that perception? There's a view that it's going to be a bottleneck for some more than others. How are you positioned in terms of gas...

Blake?

Yes, I mean we're living through another tight Waha right now, expected to be tight until late '23 when the expansions come online. We've lived through this before. In response to that, we moved about 40% of our Permian gas to Houston Ship. The rest is priced at Waha, but it's covered by firm sales with our processors. So we have surety of flow. We got to see that a few weeks ago when a Bcf came offline in the Permian due to all this planned maintenance, we had absolutely no interruption to flow. So there is some price risk. While it's 60% of our Permian gas, it's only 6% of Coterra's gas portfolio. So minimum impact to cash flow. We expect you'll see volatility until the new pipes come online, any time there's shoulder seasons, weak demand or planned maintenance.

I don't want to repeat myself, but it goes back to that capital allocation question then. So is that a constraint on where you might want to optimally allocate capital?

Well, we probably, in 2023, will not put significant capital into gassier plays. And we have a number of deeper, gassier plays. Some of the Lower Wolfcamp plays look very attractive to us, but they're relatively gassier. Now we'll test a zone or 2 because we're delineating, but in terms of any meaningful volumes, I think we would probably shy away from that. But Blake made the key point here, a Delaware Basin well will get drilled even if the gas price were 0, because it's all about the oil revenue, the oil and natural gas liquids. When we process that gas, we get to natural gas liquids. The price of methane is almost irrelevant to a Delaware Basin drilling decision, which is part of the problem. I mean that creates a problem because it is almost a byproduct and not an economic target in and of itself in Delaware Basin. So the critical point for Coterra is not what is the price of that product, but can our wells produce? Because we're -- I won't quite say we're indifferent to gas price, but we're close to indifferent to gas price in the Delaware Basin drilling decision. And we have -- we've scrubbed our contracts. We have great counterparties. The Coterra molecule will flow throughout '23.

Yes, to dwell on that a little bit longer here. So if you are constructive gas, let's say, if we get to that 2025 and 2026 time frame and you just mentioned that you sell about 40% of your gas to Houston Ship Channel, and then you have the gas selling basin. If you're constructive gas, just from a takeaway perspective over time, do you just want to actually move away from that in-basin pricing? And do you want that capacity on the Gulf -- granted, it's not a big part of your revenue but if you're constructing the gas price, do you want to build that portfolio so you're not as exposed to in-basin...

Yes. We're always looking at every opportunity to diversify our Permian portfolio. And there's lots of good projects in the works right now. But they're long term, they're big commitments, we spend a lot of time studying them. But yes, there's plenty of projects to come.

John, if I could jump in here. One of the fun things about Coterra over the last 14, 15 months has been seeing really bright people come together and accomplish what we set out to and that's to have a better organization. And one of the places where, quite frankly, we're very impressed with is our marketing group. Blake oversees our marketing effort, and they have been tremendously creative in getting a variety of markets established, both in-basin and out-of-basin, and they wake up every morning and just are very, very creative in their thought process. So we love diversity of markets, and we've got pretty good diversification.

Appreciate it. Back to you, Doug.

So Tom, we've only got about 7 or 8 minutes left. So I'm going to try and hit a couple of Scott Schroeder questions. He's not here to defend himself, so -- but -- so obviously, the breakeven economics for the portfolio are evolving. Cash taxes are becoming a real part of the industry going forward. When you look at it today, to the extent you can, I know it's not precise, taking inflation into account, where do you think your portfolio breakeven has moved over the last couple of years?

Well, the last time we publicly talked about it, we were in the 40s of oil and 2s in gas. The big impact now will be inflation and...

Or higher gas prices?

Yes, well, higher gas prices. But in terms of a breakeven, inflation is going to be the big determinant. And I'm sure that's moved up. I have not seen it [ post form ] calculated. We have very low breakevens, but we don't have a magical elixir to push back on inflation. I wish I could tell you we did, but we don't.

Right. So that kind of begs the question then, as you think about value, which is obviously what we all -- you want to create value, we try and assess our view of value, there's a number of things that come to mind. And one of them, you talked about inventory depth not being an issue. But if you look at the relative performance of some of your peers, and just recently, the companies that took a step change higher in performance were those pursuing share buybacks versus other forms of cash distributions. So given you are generating substantial free cash flow, how do you think about the right vehicle to allocate cash back to shareholders? We don't like variable dividends.

You should have said something, Doug.

So I'm just setting up a little bit, but I'm just curious as to how you think about it because it's starting to show up. The share buyback guys appear to be getting the edge.

Well, we listen to our owners on that. I mean we really do have constructive engagement with our owners. And of course, there's a wide variety of voice. But I would say on balance, most of our owners are still very constructive on the combination of the ordinary and variable dividend. We also, as you know, are in the midst of a fairly aggressive share buyback. And we haven't pre-telegraphed a re-upping of that. But we're probably going to run through our initial allocation here in not too long, and we'll have that discussion in our Board room. Yes, we like all of the approaches. We like having the flexibility for ordinary dividend variable buyback, but also debt reduction. We've certainly exercised all 4 of those here over the last few quarters. We continue to engage with our owners and most of them have been very supportive about...

It's an intellectual debate. I'm not going to get into it here, but it's -- I'm sure you've read our views on this. But I guess if you believe as most managements do that there is fundamental value in the stock buybacks of a different -- it's a different spin on the justification of a buyback, I guess, is what I'm saying. And it seems some others have chosen -- I'll use one example, Apache Corporation. They are completely unhedged, but they have 0 variable dividend, and they bought back 5% of their stock in the third quarter, stock responded to that. So I'm just curious if that's something you would ever consider...

Well, look, we're pro buyback. It's just -- it's a matter of complexion. I'm not -- I'm very supportive of buybacks.

So my last kind of topic I want to address, I'm not sure if you'll go there with me or not, but it's M&A. I opened up the discussion saying that you were one of the few companies to actually have done a deal during the downturn. And obviously, there were a lot of things talked about at the time, but you've done it. You've taken out the cost, you've succeeded in delivering the synergies. You've got the operational overlap that you wanted to, to basically looking at the different assets with the combined team. But as we look at the generic sector, and this is self-serving, as we look into 2023, our view is that there's been massive strategic convergence across the industry. Everybody is doing the same thing, load of no growth with cash returns to shareholders, facing inflation and restrictions on your ability to grow. So it seems to us that the next -- sorry for the long-running question. It seems to us the next leg of value creation in the sector is management's ability to take out other people's costs, especially those that have already had the experience of consolidation. Why should we not look at Coterra as a consolidator?

Well, we certainly have the wherewithal. We have the financial wherewithal. We have the organizational wherewithal. And we have the experience to manage multi-basin portfolio. So do I think Coterra would be a good -- whether you want to call it a consolidator, I'll phrase it differently. Do I think Coterra would be great stewards of additional assets? Yes, I do.

I like that.

Now how you acquire those assets is the challenge. We really -- when I go shopping, my first stop isn't to go to Neiman Marcus. And a lot of these assets Neiman Marcus price. And we look at full cycle returns, and we hold ourselves accountable to full cycle returns. And what you pay for an asset is something you carry forward for all time, regardless as to whether you may have forgiven us for it and we're either very positive go forward -- that price you pay for an asset, you never leave that behind. It impairs your capital cost, your return on capital for all time. So it has to be a great asset. It has to be one that we think is more valuable in our hands than the seller. But it has to have an acquisition price that's attractive to our owners over the long term. We look for that every single day. We're a very curious organization, and we're opportunistic. We have the wherewithal. We have the optionality, but we also have the discipline. And we want to be good stewards of capital and will be measured over the long term on that. And that's...

Well, I'll close out with this. I mean the stock has actually been okay. It's -- you're not as oily as others. But if you kind of look at it within a certain peer group, you've really just been range bound. So how do you think you'd force the market to break yourself out of that? What do you -- I guess I'm kind of going back to buyback...

No, no, no. That's a good question, Doug, and I appreciate the opportunity. You're right. Everybody is trying to look the same. I ask myself, how many taco stands do we need on this block? Everybody's ordinary variable, buyback, debt reduction. And the differentiating factor is how long can you do that? And that will be asset quality. You hear a lot of our peers talking about a limit to Tier 1 inventory. You don't hear Coterra talking about that. We can perform over the long haul for as long as we can see. Now that's a big statement. And over time, we will demonstrate that to the marketplace. And a differentiating factor for Coterra today, in my career, will be what has been a different changing factor at every point, and that's results, generating consistent results, having credibility in the marketplace. And people realize, you know what, I'm going to hitch my wagon to you. That's what will differentiate Coterra.

For what it's worth going into 2023, defensive balance sheets, execution track records, all of that stuff, you tick all of those boxes. And now the gas price, we think, is moving in your favor. We can see how that could work out. So we appreciate you being here, gentlemen. Thanks very much.

Thank you very much...

Thanks for making the trip. Thank you.