Diamondback Energy (FANG) Q2 2023 Earnings Call Transcript

Diamondback Energy (FANG 0.32%)
Q2 2023 Earnings Call
Aug 01, 2023, 9:00 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good day and thank you for standing by. Welcome to the Diamondback Energy second quarter 2023 earnings conference call. At this time, all participants are in listen-only mode. [Operator instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to the VP of investor relations, Adam Lawlis, please go ahead.

Adam Lawlis -- Vice President, Investor Relations

Thank you, Jules. Good morning and welcome to Diamondback Energy second quarter 2023 conference call. During our call today, we will reference an updated investor presentation and letter to stockholders, which can be found on Diamondbacks website. Representing Diamondback today are Travis Stice, chairman and CEO; Kaes Van't Hof, president and CFO; and Danny Wesson, CCO.

During this conference call, the participants may make certain forward-looking statements relating to the company's financial condition, results of operations, plans, objectives, future performance, and businesses. We caution you that actual results could differ materially from those that are indicated in these forward-looking statements due to a variety of factors. Information concerning these factors can be found in the company's filings with the SEC. In addition, we will make reference to certain non-GAAP measures.

The reconciliations with the appropriate GAAP measures can be found in our earnings release issued yesterday afternoon. I'll now turn the call over to Travis Stice.

Travis Stice -- Chairman and Chief Executive Officer

Good morning and thank you, Adam. As Adam mentioned, last night, we released a shareholder letter in conjunction with our press release and this is our second quarter in a row we've tried this. I hope you find it useful. We believe that, that not only increases the transparency directly to our shareholders but also improves efficiency.

And those of those of you who have followed our story for a long time know how important improving efficiency is to us. So with that, operator, let's move right into questions. If you'll open the line.

Questions & Answers:

Operator

[Operator instructions] Our first question comes from the line of Neal Dingmann of Truist Securities. Your line is now open.

Neal Dingmann -- Truist Securities -- Analyst

Morning, Travis Stice. Nice quarter. Travis, my first question, maybe get right to it, is on service costs, where we've heard a lot of chatter about significantly. Could you speak to maybe the current rig and frack rate environment today versus a couple of months ago? And maybe more importantly, what are you all assuming the change in cost for the remainder of the year and how this could impact the '24 levels?

Travis Stice -- Chairman and Chief Executive Officer

Neal, good morning. That's a good question. When you look at our business partners on the service side, they have always been responsive to declining and increasing rig count. And the Permian Basin rig count continues to decline.

And with the discipline we're seeing across the E&P space with a reluctance to increase spending, we believe that we will continue to see a softening in cost on our -- from our friends on the service side. Now with that -- that's only part of the calculus. The other part, which we view more as the variable side, we continue to drive costs out of the equation with increased efficiency. And like we talked about in May, we also see continued input costs coming down on steel, cement, and other items.

So it's hard to forecast into the future, but we definitely believe that we're going to see a softening in many of the costs that we've seen from the first half of the year. And we also continue to rely on the organization to do things more efficiently, which they continue to do quarter over quarter.

Neal Dingmann -- Truist Securities -- Analyst

So, Travis, is it too early to call any deflation for next year at this point?

Danny Wesson -- Chief Operating Officer

I think it's premature to call deflation from where we're headed at the end of the year, Neal. I think, high level, we entered the year in the Midland Basin in, like, the low seven hundreds of foot drilling complete and equipped costs and we'll probably exit the year in the low six hundreds of foot. Again, we're not calling for a cratering of the service market. We're just calling for a rationalization of it, where costs only went up into the right for all service lines and raw materials for seven or eight quarters.

And now that's coming back down to earth a little bit. So we can kind of enter 2024 and -- or exit 2023 in the low six hundreds per foot in the Midland Basin. That feels like a pretty good baseline for 2024.

Neal Dingmann -- Truist Securities -- Analyst

Great point, guys. And then my second question on capital spend, specifically, it looked like you slightly increased the midstream and upstream capex guide just very, very slightly. But I'm just wondering, are you able to give a little color on maybe how this will be allocated both for the upstream and midstream. And then potential benefits that this slight push in cost, especially noticeable around the Midstream, but I'm curious around both, maybe any benefits that we could see from this upturn?

Travis Stice -- Chairman and Chief Executive Officer

Yeah, I'll start with the upstream. We drilled a lot of wells in Q2, right. We drilled a record amount of wells, 98 wells in the quarter. That would imply we're drilling almost 400 wells a year versus guidance at 340.

So a lot of a lot of pipes in the ground, a lot of lateral footage drilled, almost a little over a million, 1.1 million lateral feet. So it was a good quarter operations. It was -- which is why we're slowing down the drilling pace in the second half of the year and building a few ducts. So that's kind of part of the main bump on the DC&E side.

And then on the midstream side, we have a lot of infrastructure in the Midland Basin that most of it is -- does have extra capacity. And if a neighbor needs water or needs to dispose of water and we have that capacity, we will spend a few dollars to connect to that person. So a few unique opportunities came up in Martin County throughout the last three or four months and we're going to spend some dollars to go get a lot of barrels and that's high payback, high return midstream spend.

Neal Dingmann -- Truist Securities -- Analyst

Helpful. Thanks, guys.

Travis Stice -- Chairman and Chief Executive Officer

Thank you, Neal.

Operator

Our next question comes on the line of Neil Mehta of Goldman Sachs. Your line is now open.

Neil Mehta -- Goldman Sachs -- Analyst

Thank you so much, guys. The first question, Trav, is just on the M&A landscape in the Permian and maybe you could talk about, DC&E role for Diamondback to continue to be a consolidator in the basin. And then also provide an update on the asset sales as the program has gone very well for you guys?

Travis Stice -- Chairman and Chief Executive Officer

Yeah, I'll take those in reverse order. If you're talking about the deals that we did earlier in the year, they've been seamlessly integrated with absolutely no issue. I will say that both of those companies we acquired were running more rigs than we're currently running now, which again continues to be the trend. As you see, acquisitions occur, operators that are acquiring or dropping rigs as they focus on increased profitability.

The landscape, Neil, certainly relative to what we've seen in the last couple of quarters, there's just really few opportunities out there. I mean there was a rush primarily on the private equity side to get deals into the market. And relative to what we see right now is very, very, very, very limited. As to FANG's role in M&A, we have created a lot of shareholder value through M&A, but our discipline has also been noteworthy as well too.

It's not important to win every deal. It's important to win deals that make us not bigger but better. And so we'll continue to always hold ourselves accountable to that. But I'll go back to my earlier comment that relative to what we've seen in the first half of the year, it's pretty farce on a go-forward basis.

Neil Mehta -- Goldman Sachs -- Analyst

Yeah. Thanks, Travis. And the follow up is just optimal capital structure. We've talked about this in the calls over the years, but just how do you think about what the optimal cash level, leverage level is for the business, and -- it'll help us sort of calibrate the return of capital profile for the company too.

Thank you.

Travis Stice -- Chairman and Chief Executive Officer

Sure, the leverage, obviously moves around with oil price, but I think having a leverage ratio of less than one is appropriate for the size and scale of a company of Diamondback size. I do think also that building a little bit of cash on the balance sheet continues to make sense in order to be opportunistic for share repurchases in a countercyclical way. But those are kind of the two inputs that we build our capital structure and return model around.

Neil Mehta -- Goldman Sachs -- Analyst

Thanks, Travis.

Operator

Our next question comes from the line of Arun Jayaram from JPMorgan. Your line is now open.

Arun Jayaram -- JPMorgan Chase and Company -- Analyst

Good morning, Travis and team. My -- both of my questions relate to capex. My first question is on your updated guide, you're guiding to an $80 million decline in sequential capex in 4Q versus 3Q, which you're pegging as the new baseline. I was wondering if you could help us understand the drivers of the lower capex in 4Q versus 3Q?

Kaes Van't Hof -- President and Chief Financial Officer

Yeah, Arun, I would say 4Q versus 3Q is a combination of lower activity and lower costs going through the system. As you know, we're a cash cap payers, so we can see a few months in advance when capex is looking like and certainly coming down. In the out months, I would say generally that's probably the low end of a baseline for the next year. Certainly think that a low six hundreds a quarter kind of run rate feels OK, 600 million a quarter run rate feels OK for 2024.

It is on the August 1st. So we're going to put that in pencil and see where service costs shake out, but certainly things tend to be moving our way from a well cost perspective. I gave some kind of cost per foot language earlier in the Midland Basin, down to the low six hundreds by the end of the year still feels very achievable and that kind of sets our targets for the upcoming year.

Arun Jayaram -- JPMorgan Chase and Company -- Analyst

Great. And kind of stole my thunder there on the second question, but your 2024 outlook is to drive low single digits oil growth. I know the Street is now modeling around 650 million per quarter in capex, but it sounds like you're comfortable case as we stand here today at something in the low six hundreds?

Kaes Van't Hof -- President and Chief Financial Officer

Yeah, I'd say that today. Obviously, still a lot of things to shake out, but I think the quality of the inventory that we have coming up as well as the high mineral interests in the core of the basin completely undeveloped sections of units feels like a very capital efficient plan. We've kind of been highlighting this for the last couple of years. The guide on transactions provided a lot of undeveloped inventory that we can bring a large scale execution machine to and now we're seeing the benefits of those couple deals.

Travis Stice -- Chairman and Chief Executive Officer

Arun, just as a reminder, we've been guiding for kind of lower capex all year long in the back half and we're seeing it play out now. And as we laid out on Slide 6 of our investor deck, sort of a forecast by quarter of what that looks like.

Arun Jayaram -- JPMorgan Chase and Company -- Analyst

Great. Thanks a lot, gents.

Travis Stice -- Chairman and Chief Executive Officer

Thanks, Arun.

Operator

Our next question comes from the line of Derrick Whitfield of Stifel. Your line is now open.

Derrick Whitfield -- Stifel Financial Corp. -- Analyst

Hey, good morning all and congrats on a strong quarter.

Travis Stice -- Chairman and Chief Executive Officer

Thanks, Derek.

Derrick Whitfield -- Stifel Financial Corp. -- Analyst

Staying on 2024, now that you've fully integrated FireBird and Lario, what is the right base level of activity that would support the 2024 outlook from a rig and frac spread perspective?

Kaes Van't Hof -- President and Chief Financial Officer

Yeah, I'll kind of highlight what we've done in 2023 and that feels like a good baseline for the forward plan is not forever, but how we think about capital allocation. We have a business where we can run four simulfrac crews efficiently, right. And simulfrac crew, on the completion side, completes about 80 wells a year. And for us in this new business model of capital efficiency and profitable value over volumes, we're focused on running the most efficient plan possible, which would be that four simulfrac crew plan.

Absent every major change in commodity price, that's -- the plan is the plan and that allows the teams to plan their business and also allows us to execute at the lowest cost from a capex perspective. So kind of that 15-ish rigs and four simulfrac crews feels like a really good baseline for us.

Travis Stice -- Chairman and Chief Executive Officer

And just to add to that, this profitability model that we've been demonstrating now for multiple quarters in a row in the industry has pivoted to, I hope we have been able to demonstrate that volume growth is an output of efficient capital allocation that's laser-like focused on profitability. So as -- here on August 1st, as we're entertaining questions on 2024, the volume growth will be an output of efficient capital allocation that maximizes the value for our capital allocation decisions.

Derrick Whitfield -- Stifel Financial Corp. -- Analyst

Understood, thanks for that, Travis. And as my follow up, I wanted to touch on well productivity, which you've rightfully highlighted on Page 15 as a positive. When you look out to 2024, how do you guys think about well productivity relative to 2023? And then how does that project over the next few years? It feels like you guys have a very deep portfolio that has quite a bit of stability over the next several years.

Kaes Van't Hof -- President and Chief Financial Officer

Yeah, Derrick, I think generally we feel very confident in the forward outlook for productivity. I think that's going to be a unique position in North American shale. We've been -- we've time deals very, very well and we've made the shift to co-development four or five years ago now and that that's resulting in very steady productivity. As you can see within 1% of 2022 levels already in '23.

And I would just say flat feels like the baseline and if it's better than that, that's one for the good guys.

Travis Stice -- Chairman and Chief Executive Officer

Derrick, we continue to lay out on Slide 16 in this deck, what our inventory looks like. And as I look into the future, I couldn't be more confident about the long-term quality of our inventory. And in fact that confidence in the future business plan is part of the reason that we're confident in being able to increase our base dividend. I mean that's to me the clearest indication from management to our owners about the future of our business and the quality of our inventory is our ability to continually increase our base dividend.

I think our quarterly CAGR for dividend increases is around 10% since we initiated it in 2018. So I hope that helps.

Derrick Whitfield -- Stifel Financial Corp. -- Analyst

Great. Well done, guys. Thanks for your time.

Operator

Our next question comes from the line of Charles Meade of Johnson Rice. Your line is now open.

Charles Meade -- Johnson Rice and Company -- Analyst

Good morning, Travis, Kaes, Adam, and the rest of the FANG crew there.

Travis Stice -- Chairman and Chief Executive Officer

Good morning, Charles.

Charles Meade -- Johnson Rice and Company -- Analyst

Travis, I wonder if you could drill down a little bit on the improved cycle times that's allowing you to increase your gross well count for the year. Is this something that's -- I can think of a few possibilities. Is this something that where you have a couple of rigs that have just increased their performance? Or is this something that's more widespread across your whole rig fleet that perhaps bit selection or something like that, which is letting every rig just get through their laterals quicker? What's the driver there?

Travis Stice -- Chairman and Chief Executive Officer

Charles, I wish I could say it was one individual piece of technology that's transferable across our entire rig fleet, but it's much more subtle than that. And I'm going to let Danny give you some specific examples. But we get this question a lot and it's always phrased in different ways about why does Diamondback do what they do? But the answer remains unchanged. It's the culture that we have that has an extreme focus on cost control and efficiencies.

And the reason that that's important to our culture is because when we make those gains in efficiencies, those gains become permanent in part to our future capital allocation decisions, which makes us more competitive for the same dollar that's -- that we're competing with relative to our peers. And it's not -- again, it's not one or two items, it's thousands of items that are decided upon every one of these rigs. And look, we have a healthy competition among our rigs and completion crews that we incentivize monetarily for efficiency and cost control measures. And Danny, do you want to add some specifics on that?

Danny Wesson -- Chief Operating Officer

Yeah, I think we've seen certainly our year-over-year days reduced by some measurable percentage. And what it boils down to is the teams measuring every little thing they can on the rig and and measuring which way those operational metrics are trending. And when one's not trending in the right direction, they attack it with a fervor that is unlike anything I've ever seen. And that continues to output year over year improvements in execution.

And this past month we had a couple of wells that they've drilled at all time records for us for 7,500 foot laterals that were some five-day wells for -- just over four days to TV. And those results are remarkable and we don't talk about individual well results a lot, but those are the things that we continue to do in the day to day of the company that continue to drive our execution downward.

Travis Stice -- Chairman and Chief Executive Officer

Charles, just one added to that. We just completed our quarterly reviews several weeks ago. And the teams present to us levels of details of measurement that Danny was talking about, which -- it's almost stunning to me, but we do it almost every quarter. And that is they measure how long it takes to physically screw pipe together for 300 times for every trip that they make.

And and that measurement of just simply screwing pipe together in five minutes versus the next rig over that was six minutes. You think it doesn't matter. But you do that several bit trips, bit runs, per well, it adds up. And that's the level that our organization focuses on efficiency.

And we have a lot of Diamondback employees listening into this call this morning, and I want them to hear that I'm proud of that work that they continue to do and deliver those results of four days, 7,500 foot wells that Danny just alluded to.

Charles Meade -- Johnson Rice and Company -- Analyst

Thank you, Travis. It reminds me of that saying what gets measured gets done. But second question and this kind of gets to the capital structure question. The -- I want to ask how you view the decision or the trade-off between the share buybacks and the note buybacks.

I'd like to see those note buybacks and it looks like you guys did it some good prices. But I sometimes I could perhaps get lost in the because it's not technically a cash return to shareholders, but it is a return to shareholders. So how do you guys approach that look on buying back notes versus shares?

Travis Stice -- Chairman and Chief Executive Officer

Let me -- let me talk to you about how we discussed it at the board level. The primary form of shareholder return is in our base dividend and we put that in place to be not only a sustainable but a growing base dividend. And as I talked about earlier this quarter, we increased our base dividend another 5%. And so as you look into the future, that that base dividend will remain of paramount importance to us.

And we believe that we have that base dividend covered down to $40 a barrel of oil. So I just gave you some confidence as to that base dividend. The second piece of the equation is share buybacks and share buybacks are determined based on our future expectation of future cash flows and turned into a stock price. So that we can measure where we want to repurchase shares back.

And so you can tell from the last several quarters the fact that we've leaned in all of our discretionary free cash flow after our base dividend to repurchase shares. And in a general sense and not specific because everybody wants to know what stock price we're using, which we won't say until the quarter's behind us, but the lower the stock price, the more you get share repurchases. The higher the stock price, you tend to purchase less. So I hope that makes sense.

And then anything left over from that calculus, Charles, is going to be distributed in the form of a variable dividend because we made a commitment to our owners that we would return 75% of our free cash flow. So I hope that makes sense.

Charles Meade -- Johnson Rice and Company -- Analyst

Thank you for that elaboration. Appreciate it.

Operator

Our next question comes from the line of Subash Chandra from Benchmark Company. Your line is now open.

Subash Chandra -- The Benchmark Company -- Analyst

Hi. Good morning, everyone. The first question is how you think of oil cuts going forward into '24, Is that a function of of maybe the zones you're drilling or just spatially where the acreage is located or perhaps other factors like gas capture, etc.?

Kaes Van't Hof -- President and Chief Financial Officer

Yeah, good question. Listen, we're allocating a lot of capital to the northern Midland Basin, where it's very oily, particularly early time. I think we kind of guide people to 59%, 60% oil. I think that's probably a fairly good baseline for the next few years.

In a world where we're not growing as much, that oil cut stays flat, comes down slightly because the oil declines a little faster than the gas piece. But generally, we had a couple of higher gas cut wells in the Delaware base in the beginning of this year that boosted the gas production as a company. But overall kind of high 50s, 60% and a good quarter would be a good range for oil cut.

Subash Chandra -- The Benchmark Company -- Analyst

Terrific, thanks. And the follow up is, I guess, on asset sales. So they've been largely midstream. How do you think the market now is for upstream assets now that oil has returned back to 80, the bid/ask.

And in the cash flow statement, I think there was 140 million, 150 million of asset purchases. Just curious if that's just a flow -- overflow from the first quarter on deals announced already or just immaterial acquisitions?

Travis Stice -- Chairman and Chief Executive Officer

Yeah, I'll take that. Two ways. Generally on the purchase side, we've been doing a little bit of leasing as well as a little bit of netting up. We try to make our asset teams involved in BD.

They're making offers on undeveloped interests and those non op pieces that we don't own in our development. So they're doing work there. We've been looking at leasing some of the deeper rights in the Midland Basin across some of our positions. So that's tied to some of those purchases in the cash flow statement.

And then on the divestiture side, and we divested a good amount of what we deem non-core acreage. Acreage that doesn't compete for capital in the next kind of ten years of development, and have received some good prices there. I'd say we're on the sidelines more on the divestiture side today outside of what would be a very unique offer. Instead we're more focused on the non-core midstream type divestitures like the Omaha divestiture we announced this earnings.

We didn't increase our non-core assets sale target. We certainly have some more assets that that make sense to sell. We'll just most likely be tagging along and not controlling the process.

Subash Chandra -- The Benchmark Company -- Analyst

Thanks so much.

Travis Stice -- Chairman and Chief Executive Officer

Thank you.

Operator

[Operator instructions] Our next question comes on the line of Leo Mariani of ROTH MKM. Your line is now open.

Leo Mariani -- ROTH MKM -- Analyst

Hi, guys. Want to talk a little bit about production here. So second quarter, very nice beat versus the guidance. I think you guys said that you kind of drilled a record number of wells in the quarter.

You're looking at third quarter production guide does indicate that on a total basis production should be down a little bit this quarter. Can you just help us kind of think through that dynamic a little bit with kind of record drilling last quarter, but production is coming down, maybe you guys are kind of holding some wells off in terms of turning them in line till later in the year. What's kind of happening there?

Travis Stice -- Chairman and Chief Executive Officer

Yeah, Leo, I kind of see -- we kind of think about the oil guidance as what drives the decisions here at the company. I kind of see Q3 as flat, maybe up a little bit from Q2. But Q2 is a very good quarter from a completions perspective. The drilling side doesn't drive the production profile.

We were probably building a few ducks in the back half of the year to set us up well for the next year. Completion cadence was also high in the first half of the year. I think we completed 89 wells in Q2 and then come down to kind of 80-ish for Q3 and Q4. So I think again the production is the output of smart capital efficient decisions.

If this was 2017 or 2018, we'd be stepping on the accelerator and spending more capital, but instead we're focused on generating more free cash flow in the second half of the year and returning that cash to shareholders.

Leo Mariani -- ROTH MKM -- Analyst

OK. That's helpful. And then just on on capital here, so kind of looking at kind of where you guys were in the second quarter, I mean it looks like that's going to be the peak, so we should be expecting capex to come down, I guess, both in 3Q and 4Q. How much of that is kind of related to service costs? You just talked about fewer completions in the second half, but is it really fourth quarter where you start to see maybe more service cost benefit? You talked about going from low 700s per foot, start the year to kind of low sixes by the end of the year.

So are you starting to get some of that benefit here in 4Q? Similar number of completions 80 should be down kind of a fair bit on capital here in 4Q, just help us think through that a little bit.

Travis Stice -- Chairman and Chief Executive Officer

Yeah, I think right now we're seeing the benefits of the raw materials decreases coming through the system, mainly pipe, cement, diesel and now kind of after this call through the end to Q3 into Q4. some of the true service side rolling through the numbers. As we mentioned, we're a cash capex payers. So today we're paying for activity in June, so we kind of have a good forward outlook that, that capex is coming down.

I think the cost per foot we're seeing on wells put in the ground today is lower even than Q2 and that's all going to translate to a lower average loan cost in -- at the end of the year.

Leo Mariani -- ROTH MKM -- Analyst

OK, thanks.

Travis Stice -- Chairman and Chief Executive Officer

Thanks, Leo.

Operator

Our next question comes from the line of Paul Cheng of Scotiabank. Your line is now open.

Paul Cheng -- Scotiabank -- Analyst

Thank you. Good morning, guys. Two questions please. One of your large customers is thinking  about how much is there you are recovery rate has improved or is going to improve based on the work that they are doing.

I'm just wondering that, Travis, that in this debate, I mean are you guys looking into that or that whether that be based on today's technology and commodity price, is it economic for you to pursue trying to substantially improve the recoverable rate? That's the first question. Second question is on --

Travis Stice -- Chairman and Chief Executive Officer

Yes, Paul, let me answer the first one first. I think Diamondback is really a technology company that produces oil and we spent a lot of time looking at improving URs, we spend a lot of time looking across the fence line at what competitors and peers are doing. There's not a ton of secrets in the Permian Basin. So if there is a better mousetrap, we're going to find a way to do it.

I think our advantage is that we can do it at a lower cost. So generally, we're constantly pursuing improving URs, improving recoveries, improving technologies. You'd expect us to be on our front foot there. I think we're going to spend a ton of dollars testing that, but we would be a fast follower on anything that looks to be working.

Paul Cheng -- Scotiabank -- Analyst

Yeah, I mean based on what you can see today on the technology and the current pricing, is it profitable that to pursue such activities?

Travis Stice -- Chairman and Chief Executive Officer

I don't think it's possible today. I certainly think there's some people spending money to look at it, but for us we really want to allocate capital to the best returning projects that we have today. And that for us is high-return, multi-zone developments in the Midland Basin.

Paul Cheng -- Scotiabank -- Analyst

Great. The second question is on the left-hand lane. You guys have been very successful, continuing to lengthen it. I think the third quarter is expecting about 10,800 feet.

Based on your existing lane position in your portfolio, do you think that that's far more room for you to your average lane is going to be able to push substantially higher than here or that we are pretty close to the max unless there's some meaningful portfolio changes?

Travis Stice -- Chairman and Chief Executive Officer

Yeah, I think it's a risk-reward decision. There's certainly some areas where we can drill longer I think. But I think generally the way our land position's laid out, the way our acreage sits today, that 10,000 to 11,000 range feels about right on average. We'd rather drill a 15,000 footer than two 7,500 footers.

But I think today we'd rather drill two 10,000 footers versus one 20,000 footer. So I think the drilling guys can do it on the drilling side. There's no doubt about it's a risk-reward decision because if something bad happens at 18,000 feet, that's an expensive mistake. So we'd rather continue to get wells down at 10,000 feet in eight, nine days consistently versus risking a 30, 40-day well and something goes wrong.

Paul Cheng -- Scotiabank -- Analyst

All right. Great. Thank you.

Travis Stice -- Chairman and Chief Executive Officer

Thanks, Paul.

Operator

Thank you. At this time, I would now like to turn it back to Travis Stice for closing remarks.

Travis Stice -- Chairman and Chief Executive Officer

Appreciate everyone listening in this morning, good set of questions. Hope you have a fantastic day. If you've got any questions, just reach out to us at the number provided.

Operator

[Operator signoff]

Duration: 0 minutes

Call participants:

Adam Lawlis -- Vice President, Investor Relations

Travis Stice -- Chairman and Chief Executive Officer

Neal Dingmann -- Truist Securities -- Analyst

Danny Wesson -- Chief Operating Officer

Neil Mehta -- Goldman Sachs -- Analyst

Arun Jayaram -- JPMorgan Chase and Company -- Analyst

Kaes Van't Hof -- President and Chief Financial Officer

Derrick Whitfield -- Stifel Financial Corp. -- Analyst

Charles Meade -- Johnson Rice and Company -- Analyst

Subash Chandra -- The Benchmark Company -- Analyst

Leo Mariani -- ROTH MKM -- Analyst

Paul Cheng -- Scotiabank -- Analyst

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