Pioneer Natural Resources Co

LSE:0KIX

Earnings Call Transcript 2022-Q2

[Operator]

Good day, ladies and gentlemen, and welcome to the Pioneer Natural Resources' Second Quarter Earnings Conference Call. Joining us today will be Scott Sheffield, Chief Executive Officer; Richard Dealy, President and Chief Operating Officer; and Neal Shah, Senior Vice President and Chief Financial Officer.

Pioneer has prepared presentation slides to supplement comments made today. These slides are available on the Internet at www.pxd.com. Again, the shared Web site to access slides presented in today's call is www.pxd.com. Navigate to the Investors tab found at the top of the web page, and then select Investor Presentations. For information, today's conference is being recorded, and a replay of the call will be archived on www.pxd.com, through August 28, 2022.

The company's comments today will include forward-looking statements made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements and the business prospects of Pioneer are subject to a number of risks and uncertainties that may cause actual results in the future periods to differ materially from forward-looking statements. These risks and uncertainties are described in Pioneer's news release on page two of the slide presentation, and in Pioneer's public filings made with the Securities and Exchange Commission.

At this time, for opening remarks, I would like to turn the call over to Pioneer's Senior Vice President and Chief Financial Officer, Neal Shah. Please go ahead, sir.

[Neal Shah]

Thank you, George. Good morning, everyone, and thanks for joining us for Pioneer's second quarter earnings call. Today, we will be discussing Pioneer's strong second quarter financial and operating results, and our peer-leading return of capital strategy. We will also detail our best-in-class margins, and unmatched depth of high-quality inventory, along with our leading ESG strategy, which is also detailed in our recently published 2022 Sustainability Report. We will then open the call for your questions.

With that, I will turn it over to Scott.

[Scott Sheffield, Chief Executive Officer and Director]

Thank you, Neal. Good morning. We're starting on slide three. Pioneer delivered strong results, generating $2.7 billion in free cash flow in the second quarter. Additionally this quarter, we increased our base dividend by more than 40%, which is supported by our high-quality assets, deep inventory, peer-leading margins, and strong balance sheet. This is the third base dividend increase in the previous four quarters, and represents a greater than 95% increase to the base dividend over the previous 12 months. This annualized base dividend of $4.40 per share has a yield that exceeds the S&P 500 average at our current share price. Inclusive of this base increase, the quarter's base plus variable dividend results in a total dividend payout of $8.57 per share to be paid in mid-September.

And I've always said we would aggressively repurchase shares when the market presented opportunities. Consistent with this we repurchased $750 million since the end of the first quarter, including $500 million during the second quarter, and additional $250 million repurchased in July at an average share price of $2.13. Since reinitiating stock buybacks in the fourth quarter of last year, we have retired approximately 2.5% of our shares outstanding. Additionally, we recently published our 2022 Sustainability Report which highlights our focused and significant progress on ESG initiatives, including accelerating our target to end routine flaring to 2025, and joining the Oil and Gas Methane Partnership 2.0.

Pioneer places a high priority on environmental stewardship, and continues to make progress toward our goals.

Going to slide number four, Pioneer's strong execution continued during the second quarter, with total production in the upper-half of our guidance range, supporting significant free cash flow generation of $2.7 billion. Our horizontal LOE continues to be low, and our strong balance sheet is one of the best in this sector.

Going to slide number five, we believe that maintaining a strong and growing base dividend is the foundation of our capital return strategy. As I mentioned earlier, we have further strengthened our base dividend with a significant increase of greater than 40% from last quarter. This material increase is underpinned by our balance sheet strength and our durability of our cash flow across commodity price cycles. Inclusive of this increase, our dividend now has grown by an average of 95% annually over the previous six years. This increase significantly outpaces both peers and majors over the same period, many of which have cut or suspended their dividend.

Going to slide number six, complementing our strong shareholder cash returns through dividends, we continue to repurchase our shares opportunistically, and have executed $1.25 billion since the fourth quarter of 2021, an average share price of $2.18. This represents a reduction of total shares outstanding by approximately 2.5%. Consistent with our statements to be aggressive during market opportunities, we repurchased an additional $250 million of stock during the market pullback, in July, at an average share price $2.13. As evidenced by the repurchase during July, we will continue to utilize [10b5] [Ph] programs to take advantage of market opportunities. To date, we have utilized one-quarter of our current $4 billion authorization, leaving $3 billion remaining.

Going to slide number seven, we remain committed to our core investment thesis, underpinned by low leverage strong corporate returns and low reinvestment rate. This delivers all production growth of up to 5% annually, and generates significant free cash flow. The majority of this free cash flow was returned to shareholders in the form of base plus variable dividends, with total cash returned via dividends representing approximately 80% of our free cash flow. This compelling cash return is enhanced by opportunistic share repurchases and continued balance sheet fortification. When including second quarter share repurchases, we returned greater than 95% of second quarter free cash flow, which equates to an annualized yield of approximately 19%.

Going to slide number eight, Pioneer's capital return framework remains best-in-class. With the return of capital framework described on the prior slide, you can see here Pioneer is forecasting to lead all peers in the percentage of free cash flow being returned to shareholders through dividend and share repurchases.

Going to slide number nine, dividends through the cycle, Pioneer high quality assets, low breakeven, disciplined OR growth is up to 5% provides ability to return significant free cash flows through dividend over a wide range of commodity prices inclusive of the impact of expected cash taxes. As seen on the graph, if oil prices were to average $60 per barrel over the next five years, Pioneer shareholders will receive approximately 5% annual yield at current share prices. This yield is over 2.5 times more than S&P 500 average. Again, that is $60 WTI flat. At $100 WTI flat, which I believe will be the most likely outcome over the next five years as we March forward as demand continues to increase with minimal supply increases, the yield is 12%, so significant upside.

Going to slide number 10, the third quarter dividend payments outlined previously resulted in extremely compelling annualized yield of approximately 15%. This yield exceeds all peers, majors and the average yield of the S&P 500.

Going to slide number 11, Pioneer's 15% annualized dividend yield surpasses the S&P 500 average by greater than 7 times. Looking beyond our peer group to the broader market, Pioneer's dividend yield exceeds every S&P 500 sector and remains higher than any individual company in S&P 500. With our double digit dividend yield, complementary share repurchases, and up to 5% oil growth, the case of owning Pioneer stock is compelling.

I'll now turn it over to Rich.

[Richard Dealy, President and Chief Operating Officer]

Thanks, Scott, and good morning, everybody. I am going to start on slide 12, where you can see our current full-year 2022 production guidance remains unchanged at $350,000 to $365,000 barrels oil per day and $623,000 to $648,000 BOEs per day. You can see we revised up our 2022 capital to $3.6 billion to 3.8 billion, up from $3.3 billion to $3.6 billion previously really reflecting the inflationary pressures we are seeing in diesel and steel primarily and to lesser extent in sand and chemicals and labor. Our plan is expected to generate greater than $13 billion in operating cash flow which is up from $10.5 billion at the beginning of the year. So, $2.5 billion increase relative to midpoint to midpoint $250 million on capital. This is going to result in over $9 billion of forecasted free cash flow in 2022.

Consistent with our investment framework that Scott outlined, we expect modest production growth this year and a reinvestment rate of less than 30% and returning the vast majority of our free cash flow back to investors via dividend and opportunistic share repurchases. On average, our activity level for the year remains unchanged. We expect to run 22 to 24 drilling rigs in approximately six frac fleets. Of which two of those are simul frac fleets. This will result in placing of roughly 500 wells on production in 2022.

Turning to slide 13, and thanks really for the hard work and focus of our teams across the company, we continue realize operational efficiency improvements. Our implementation of simul frac has been a great success in both reducing cycle time and cost. As evidenced by the chart on the left, we have established ourselves as a leading simul frac operator having completed the most simul wells of any operator.

As you can see from the right -- on the right side of the graph, the implementation of simul frac combined with continued operational improvements have significantly benefited our completions efficiency. We have doubled our completed peek per day since 2018 and are targeting further improvement in 2023 with the addition of third simul frac fleet early next year.

Turning to slide 14, which highlights Pioneer's best-in-class cash margins, our high oil percent realizations and our strong marketing arrangements drive top tier price realizations per BOE. And when you combine that with Pioneer's low cost structure as a result of our highly efficient field operations, our low corporate overhead, and our inexpensive borrowing cost at below 2%, you get peer leading cash margins that support our strong return of capital framework.

Turing to slide 15, this slide really highlights the sustainability of those best-in-class margins by showing our unmatched debt and quality drilling inventory. This third party data shows the durability of our position with decades of high quality inventory in the Midland Basin. You can see on the right side that the Midland basin is more than two times remaining top tier inventory in the Delaware Basin.

Turning to slide 16, this slide compliments the prior slide quite well. It matches our inventory duration with free cash flow per BOE, highlighting Pioneer's favorable position with the longest inventory and highest free cash flow per BOE. This combination provides Pioneer the ability to distribute significant free cash flow to shareholders for decades considering the quality and depth of our inventory.

With that, I'm going to turn it over to Neal.

[Neal Shah]

Thank you, Rich. Turning to slide 17, Pioneer's compelling value proposition is further evidenced through the combination of the two graphs on this slide, high corporate returns and an inexpensive valuation. The graph on the left demonstrates the culmination of our high-quality assets, capitally efficient development, our people, and our best-in-class margins, which drive our strong corporate returns. In fact, Pioneer is projected ROCE exceeds all other sectors within the S&P 500 to also include the majors and the broader energy sector. Pairing this strong returns profile with our discounted valuation, on the right graph, we believe results in an extremely compelling and durable investment opportunity.

With that, I'll turn it over to Scott.

[Scott Sheffield, Chief Executive Officer and Director]

Finishing up on slide number 18, our leading sustainability plan, we recently published our 2022 Sustainability Report, which highlights Pioneer's focus and significant progress on our ESG initiatives. The comprehensive report details our environmental initiatives and targets, including those highlighted on the right side of this slide. Since our last earnings call, we announced our membership into OGMP 2.0, and the addition of Jacinto Hernandez to our Board of Directors, who brings decades of investment experience. We believe that these actions demonstrate our commitment and focus on ESG, and further strengthens Pioneer's position as a leader in the industry.

Our updated sustainability report can be found on our Web site. And additionally, we expect to publish an updated climate risk report later this year. Slide 19 just summarizes all the things that we're doing in regard to enhancing shareholder value.

We will now open it up for Q&A. Thank you.

[Operator]

Thank you very much, sir. [Operator Instructions] Today's first question is coming from Mr. John Freeman calling from Raymond James. Your line is open, sir.

[John Freeman, Raymond James]

Good morning, guys.

[Scott Sheffield, Chief Executive Officer and Director]

Hi, John, how are you doing?

[John Freeman, Raymond James]

Good, thanks. A very impressive dividend, specifically, I wanted to focus on the base dividend. A year or so ago, when you all first introduced the base plus variable dividend sort of framework, the outlook was you'll have sort of this couple percent kind of rate of growth on the base dividend. And, obviously, you have done dramatically better than that since it was introduced. And I guess just trying to get a sense, maybe you can just remind us when you all think about where to take the base dividend, like how much of this is the commodity environment was far better so the balance sheet got rapidly stronger than you would have initially expected, versus maybe other things that we wouldn't be as aware of, like something about the underlying asset reinvestment rate, some change in your -- in the mid-cycle pricing? Just anything else that sort of goes into the confidence of that base dividend so we have some -- a little better idea, going forward, how we should think about that?

[Scott Sheffield, Chief Executive Officer and Director]

Yes, John, great question. As I said before, we believe in a stable and growing base dividend, and we'll continue to increase our base dividend over time. We materially increased our base dividend in recent quarters, increasing it by 95% over the past year, including this 40% increase. Over the past five years, we've demonstrated our commitment to the base dividend, increasing it by 55X without cutting it or suspending it like many of our peers. We have the ability to still grow the base dividend even when stress testing at lower oil prices between $45 to $50 WTI. In addition, I'll finish up by saying we expect to continue to increase the base dividend commensurate with our production growth. So, if we're able to grow 5% a year long-term, you would anticipate a 5% increase in the base dividend on an annual basis.

[John Freeman, Raymond James]

Great, thanks. Thanks, Scott. And then my follow-up question, Rich, last quarter you mentioned how it was actually pretty easy for you all to pick up that spot [traction] [Ph] when you needed it because you all had ready access to things like sand and diesel. And I guess I'm just interested in sort of maybe an update, as three months later here service companies keep talking about how they're pretty much maxed out on the frac side. U.S. frac count has sort of stalled out here the last couple months even as the overall rig count has gone higher. And just any updated thoughts you've got on assets still? Do you think relatively easy for someone like you all to pick up crews or are you starting to see a lot more tightness?

[Richard Dealy, President and Chief Operating Officer]

I would say it's generally gotten tighter, John, over time. I just think you've seen continue to pick up a little bit of rig activity in some frac leads. I don't know if there's a lot of spare capacity out there. I think there are some new fleets that you've seen, electric fleets that are coming into the market later this year or early next year that'll help on the pressure pumping side. So, I think it's what has caused all of us to do is move up our contracting timeline for 2023 earlier than in prior years. And so, I think all that work is underway. I don't have any concern about Pioneer getting the equipment or services that we need or materials, but I mean it's definitely a tighter market, so we're starting earlier.

[John Freeman, Raymond James]

Thanks, guys, I appreciate it.

[Richard Dealy, President and Chief Operating Officer]

Thanks, John.

[Operator]

Thank you. Thank you, sir. We'll now move to Jeanine Wai calling from Barclays. Please go ahead.

[Jeanine Wai, Barclays]

Hi, good morning, everyone. Thanks for taking our questions.

[Scott Sheffield, Chief Executive Officer and Director]

Hi, Jeanine, good morning.

[Jeanine Wai, Barclays]

Good morning, Scott. Our first question is on the tank battery expansions. That work, I think you're starting to do that in Q3. Is there more of that work that needs to be done beyond whatever you're going to handle pretty soon? And is that work concentrated in certain areas?

[Scott Sheffield, Chief Executive Officer and Director]

Yes, Jeanine, I'd say our tank battery program is consistent with how we laid out at the beginning of the year. It really hasn't -- the timing of it hasn't changed. We had a little bit of that capital that was then planned for second quarter that sliding into third quarter just for various reasons, but nothing that's impacting production at all, so, nothing new there. Our tank battery size is still the same that we've done before, we're really just really focused on the wells that we're selecting and going into existing tank batteries where we have excess capacity already. So, nothing really unusually on the tank batteries side, and work is, I would say, just is going on and as normal as we would have planned it at the beginning of the year.

[Jeanine Wai, Barclays]

Okay, perfect, thank you. And our second question, maybe we can just move to the CapEx number. So, I don't know if Pioneer thinks about it in this way or not, but some companies base mark-to-market their '22 budgets based on a certain price outlook, and that just kind of helps the analysts understand, directionally, how CapEx could change if prices change -- oil prices change. So, is your updated $3.6 billion to $3.8 billion budget, is that based on a certain oil price, and do you have an updated on what percent of 2022 or 2023 is locked in on price? Thank you.

[Scott Sheffield, Chief Executive Officer and Director]

Sure, Jeanine. I would say we don't pick a specific price, but other than get -- that capital budget range of $3.6 billion to $3.8 billion is -- you can kind of target around $100 to $120 Brent is what we would generally say that probably fits into. The biggest variable on that that's tied to oil prices is really diesel, because they'll fluctuate. With that, in terms of 2022 capital in terms of locked in, obviously, the longer we go through the year the more of it is locked in. I think, last quarter, I talked about being 60%. I don't have the exact number, but my guess just given where we're at, we're in that probably 70% to 80% range at this point. So there's -- most of it's pretty well locked up or on order or purchase orders have been put in place.

In 2023, we're still in the midst of [indiscernible] is still a little bit early. I mean I think, just in general, as we think about 2023 anywhere as I think we've talked on previous calls, that you're probably going to see another roughly 10% increase for inflation in 2023 just based on early indications. Still early, but just for planning purposes I think that would be a good number to plan around.

[Jeanine Wai, Barclays]

Very helpful. Thank you, gentlemen.

[Scott Sheffield, Chief Executive Officer and Director]

Yes.

[Operator]

Thank you very much, ma'am. [Operator Instructions] Now we'll go to Neil Mehta calling from Goldman Sachs. Please go ahead.

[Neil Mehta, Goldman Sachs]

Yes, good morning, team. Just wanted to build on that last comment around how you're thinking about 2023. And Scott, given we have a little bit more visibility, it seems, on the oil markets into 2023 as we've worked our way through the year, do you think it makes sense to grow as in 2023, how are you thinking about the production profile at this point and -- both for your company and for the broader U.S. E&P industry?

[Scott Sheffield, Chief Executive Officer and Director]

Yes, Neil, good morning. I'm still very optimistic that the oil price is going to continue to march forward with probably more upside than downside. Demand is coming back. Around the world, people are flying more. China's going to come back and as you know there's not much supply the OPEC agreement OPEC+ announced a minuscule increase today obviously to give the Biden administration some important ammunition, even though it was minuscule today. They just don't have the supply, very little left in UAE and Saudi. And so, on the basis that oil price will continue to march forward. Our focus will be on that 5% production growth of oil. So, I see, if we enter -- ever enter a downturn, that's a different question. We can actually ratchet back in that regard, but we're still focused on that long term 5% production on oil. And next year we should be one of those positive years to do it.

[Neil Mehta, Goldman Sachs]

Okay. That's helpful, Scott. And then the follow-up is around the share repurchase program. And you highlighted that, you ended up buying up back stock here opportunistically in July. Just talk about your framework around it. Should we think of this as a level loaded program, which supplements the dividend or one where you're going to look to use weakness to act? Thank you.

[Scott Sheffield, Chief Executive Officer and Director]

Yes, I mean, we've averaged about 2.5% over the last call it 7, they call it 9 to 10 months. We've bought back 2.5% of our stock. A lot of it is, were, is in the -- what I call opportunistic. Obviously, it depends on where share price goes. As I said in the past, we'll always continue to buy a little bit each quarter. And then when we see pullbacks as when we will step up and that's really our policy, and we'll continue to do that, we got the fire power and the free cash flow to be able to transact on that policy.

[Neil Mehta, Goldman Sachs]

Thank you, Scott.

[Operator]

Thank you much, sir. The next question is coming for Bertrand Donnes calling from Truist Securities. Please go ahead.

[Bertrand Donnes, Truist Securities]

Good morning. I'm just going to piggyback on that last one on the share repurchases. You characterized it as opportunistic, obviously oil pulled back and so did the stock, so I'm just wondering, is it a nominal level of the Pioneer stock? Or was Pioneer in a better relative position during the pullback? Or is it just maybe your optimistic view on oil? So anytime oil pulls back, it kind of creates an opportunity?

[Scott Sheffield, Chief Executive Officer and Director]

Yes, I mean, we do run our net asset value on the company. We like to get a great return when we go into the market and buy lot of the stock like we did; obviously we don't know where the stock's going to go based on the marketplace. So, our policy is continue to buy back a little each quarter then, and if for some reason we see big dips whether it's in oil or something else affecting the marketplace, then we'll be more aggressive like we have. So, hopefully that's about as simple as we can describe it.

[Bertrand Donnes, Truist Securities]

Sounds good. And then, maybe shifting gears on, across your acreage position could you maybe talk about what the returns look like in Martin and Howard versus your Southern position versus your JV and maybe how that'll influence where you run your rigs, maybe at the end of this year and next year?

[Scott Sheffield, Chief Executive Officer and Director]

Yes. You can really look at where we have our rigs running across the basin and we spread the rigs out to manage water and supply and moving things around. And so, but our returns, when you look at our top tier inventory and the depth of our inventory that we've talked about, I mean, it's really consistent across the basin for our acreage position. So, we're just less in that regard that we're Tier 1 acreage over 15,000 locations, 20-year inventory. And so, they just don't look at different amongst locations. So, that's really how we have -- you've seen over the last couple years, we're not concentrating any one area. We spread our activity out and the returns are great in all those areas.

[Bertrand Donnes, Truist Securities]

Okay. So, is it fair to say that the infrastructure's more important because of the kind of uniformity of the returns?

[Scott Sheffield, Chief Executive Officer and Director]

Well, yes, that's why I think really separates Pioneer, is the water infrastructure that we've – it was really the ability to move water around. So, we can actually add be it two simulfrac fleets consistently and get to the third simulfrac fleet is really that infrastructure allows us to do it at scale where others are -- may not have the ability to do that at the same scale.

[Bertrand Donnes, Truist Securities]

Thanks. That's all for me.

[Operator]

Thank you. We will now go to Derrick Whitfield calling from Stifel. Please go ahead, sir.

[Derrick Whitfield, Stifel Nicolaus]

Thanks and good morning. For my first question, I wanted to touch on the Inflation Reduction Act, which could be voted on this week focus in on the minimum tax in methane fee components. Could you speak to the expected implications for Pioneer?

[Scott Sheffield, Chief Executive Officer and Director]

Yes, I'll hit the methane fee and Neil can talk about the tax thing, but really we've looked at it. And if past, we don't expect the proposal of material impact on Pioneer, just based on our goal of continue to reduce methane emissions and where we're are on that curve so far. And what we've done to reduce emissions, we'll continue to monitor, but feel that we're well positioned to reduce our emissions intensity with our productions. We've laid out our sustainability report and our goals that we outlined this morning. So, really not expecting anything material based on our analysis so far.

[Neal Shah]

Hey, Derrick, good morning, this is Neil. As Rick said, we took a look at the act and as we anticipate becoming full cash tax payers in 2023, our effective tax rate is going to be above that, that 15% threshold. So, we wouldn't anticipate this proposal to have any impact on us and got our cash tax profile.

[Derrick Whitfield, Stifel Nicolaus]

Terrific. That's what I was expecting on the tax side, but maybe it's my follow-up, in thinking about the second-half '22 and 2023 capital projections, could you help frame the degree of self-help you're attaining and your simulfrac operations and long lateral development?

[Scott Sheffield, Chief Executive Officer and Director]

Yes, well, I think the simulfrac, we've talked about saves about $200,000 per well. So, the cost benefit is there, but we're also, what's driving that is we're completing roughly 50%, more feet per day. So, it's just been a big benefit. And as I mentioned earlier, our water infrastructure really supports that operation and allow -- is allowing us to get to that third frac fleet early next year. And then a longer lateral is really one we've seen great productivity out of the wells, but it just saves us 15% on a drilling and completion cost per foot. And so, it's just a more capital efficient way to do it in our continuous acreage position, and the blocking acreage allowed us to -- we've got about a thousand of those locations that we've identified today, but with trades and small acquisitions that we continue to work at, we're adding to that inventory and our acreage position just sets up well for just given how contiguous it is.

[Derrick Whitfield, Stifel Nicolaus]

Terrific. Great update and thanks for your time.

[Scott Sheffield, Chief Executive Officer and Director]

Thanks, Derrick.

[Operator]

Thank you, Mr. Whitfield. The next question is coming from Arun Jayaram calling from JPMorgan Chase. Please go ahead, sir.

[Arun Jayaram, JPMorgan Chase]

Yes, good morning. Scott, on slide 13, you highlight some of the efficiency gains you're getting on the frac side. I want to get your thoughts on just, Pioneer's kind of future procurement strategy on frac. We all know that your relationship with PUMP kind of ends around year end. And I just wanted to get your thoughts on what you plan to do with your future frac needs, is electrification in the future, or a shift towards more Tier 4 DGB equipment? Wanted to get your thoughts on that?

[Scott Sheffield, Chief Executive Officer and Director]

Yes, Arun, I'll take that. And really, as I mentioned earlier, we are in the midst of contract in 2023, as you mentioned, we have a great relationship with PUMP. They did a terrific job, and then they'll definitely, part of our 2023 program, will it be 100% of it, probably not in the grand, but they're going to still be part of it. And in terms of moving to electric fleets and DGB, we're in the process of moving that, we are definitely looking at contracting some electric fleet fleets. I think it'll be a transition to get to highline power.

We'd love to get there sooner, but the infrastructure and the current base is going to take some time to build that out. And so, it's probably going to be a progression where we'll move off these will move to CNG, LNG that we're evaluating right now. First and then get to highline power, later next year, 2024 timeframe. But it's definitely, the path we're going on. And in the midst of that, we'll also have some DGB equipment. So, we're going to have -- we're moving that way and ultimately we'll be more 100% electricity, but that's still a couple years out. Hopefully that helps.

[Arun Jayaram, JPMorgan Chase]

That's super helpful. And just my follow-up would be -- we've been getting a couple of questions around well productivity, as you have completely have integrated the Parsley and the DoublePoint assets, but Rich, I was wondering, if you could give us a sense of how you would gauge year-to-date well productivity for Pioneer relative to historical trends? I'll leave it there.

[Richard Dealy, President and Chief Operating Officer]

Yes. We're continuing to complete our wells across the field. And so, each bench has a little bit different profile, but overall, the returns that you seeing from our free cash flow per view that we generate are significant. And so, I'd say that they're consistent with the last year or so of production profiles. They're probably not quite as high as they were in '18, '19. We're just doing Wolfcamp A and Wolfcamp B, because we're doing the full stack, because it just avoid some parent child issues, longer term and a better way to develop the field and maximize NAV but overall we've had consistent results relative the last couple years.

[Arun Jayaram, JPMorgan Chase]

Great. Thanks a lot, Rich.

[Richard Dealy, President and Chief Operating Officer]

Good.

[Operator]

Thank you very much, sir. Ladies and gentlemen, that will concludes today's question-and-answer session. I'd like to turn the call back over to Mr. Sheffield for the additional or closing remarks. Thank you.

[Scott Sheffield, Chief Executive Officer and Director]

Again, thank you for participating in the call today and look forward to seeing everybody at either on the road or next quarter's call, again, thank you very much.

[Operator]

Thank you very much, sir. Ladies and gentlemen, this concludes today's call. We thank you much for your participation. You may now disconnect. Have a good day and goodbye.