Chesapeake Energy Corporation

Good day and welcome to the Chesapeake Energy Corporation first quarter 2024 earnings conference call. All participants will be in a listen-only mode. Should you need assistance, please signal conference specialists by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touchtone phone. And to withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Mr. Chris Ayers. Vice President of Investor Relations and Treasurer. Please go ahead, sir.

Thank you. Good morning, everyone, and thank you for joining our call today to discuss Chesapeake's first quarter 2024 financial and operating results. Hopefully, you've had a chance to review our press release and the updated investor presentation that we posted to our website yesterday. During this morning's call, we will be making forward-looking statements, which consist of statements that cannot be confirmed by reference to existing information, including statements regarding our beliefs, goals, expectations, forecasts, projections, and future performance, and the assumptions underlying such statements. Please note that there are a number of factors that will cause actual results to differ materially from our forward-looking statements, including the factors identified and discussed in our press release yesterday and in other SEC filings. Please also recognize that except as required by applicable law, we undertake no duty to update any forward-looking statements, and you should not place undue reliance on such statements. We may also refer to some non-GAAP financial measures, which will help facilitate comparisons across periods and with peers. For any non-GAAP measure, there is a reconciliation to the nearest corresponding GAAP measure on our website. With me on the call today are Nick Delasso, Mohit Singh, and Josh Vietz. Nick will give a brief overview of our results, and then we will open up the teleconference Q&A. So with that, thank you again, and now turn the time over to Nick.

Good morning, and thank you for joining us today. We continue to execute on our 2024 financial and operating plan, and our first quarter results further demonstrate that we are a company built to efficiently meet consumer demand and deliver sustainable value to shareholders through cycles. Today, the natural gas market is clearly oversupplied. 2024 plan is focused on discipline, operational efficiency, and free cash flow generation, while building the productive capacity needed to deliver for consumers when demand recovers. Through the first quarter, we have deferred 22 turn-in lines and built 24 drilled but uncompleted wells. In addition, we began curtailing base production in February, averaging approximately 200 million cubic feet a day of curtailment in the first quarter. As we continue building productive capacity, we expect to curtail approximately 400 million cubic feet a day in the second quarter. We believe this strategy will leave us well positioned to meet demand for natural gas when the market recovers. In the meantime, our base business continues to deliver. We generated free cash flow in the first quarter, allowing us to maintain our commitment to return cash to shareholders through our base and variable dividend program. Our capital structure remains strong. Our lending partners recently reaffirmed our credit facility and increased the aggregate commitments to $2.5 billion. As we continue to deliver on our sustainability commitments, as demonstrated by the company meeting our interim GHG and methane intensity goals, a full two years ahead of schedule. Importantly, we remain encouraged about the long-term trajectory for natural gas, the affordable, reliable, lower carbon energy the world needs. Over the next few years, we will see significant increases in demand for U.S. natural gas from LNG exports as well as power generation and industrial activity. Additionally, the current clear trajectory of supply in the U.S. is falling. We believe this sets up a much more constructive market backdrop for natural gas in future periods and believe our portfolio is well positioned to deliver gas supply where and when needed. Consumers demand that energy is reliable and efficient. both economically and environmentally. Simply put, natural gas will play a critical role in the energy future, both domestically and abroad, and Chesapeake and our pro forma merged company with Southwestern is poised to ensure natural gas delivers on its promise. We remain very focused in our integration planning efforts on delivering the cost synergies identified at the announcement of the merger to ensure our supply meets the demand of energy consumers at the most efficient price. We will be LNG ready and in an advantage position as LNG capacity continues to come online. With our well-positioned portfolio, investment grade quality balance sheet, and discipline strategy, Chesapeake is built to not only weather the current market, but to thrive when the market rebalances. I look forward to updating you on our progress throughout the year. We're now pleased to address your questions. Operator, if you could start the queue.