PDC Energy, Inc.

Thank you for standing by. Welcome to the PDC Energy Second Quarter 2022 conference call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. Please be advised that today's conference is being recorded. I would now like to hand the conference over to the speaker today, Aaron Vandefoort. Please go ahead.

Thank you, and good morning, everyone. On today's call, we'll have President and CEO Bart Brookman, Executive Vice President Lance Luck, Chief Financial Officer Scott Myers, and Senior Vice President of Operations Dave Lillo. Yesterday afternoon, we issued our press release and posted a presentation that accompanies our remarks today, as we filed our Form 10-Q also last night. The press release and presentation are available on the Investor Relations page of the website at www.pdce.com. On today's call, we will reference both forward-looking statements and non-US GAAP financial measures. Actual results may differ materially than those projected in the forward-looking statements. The appropriate disclosures and reconciliations may be found on slide two and the appendix of that presentation. With that, I'll turn the call over now to our CEO, Bart Brookman.

Thank you, Aaron, and good morning, everyone. Let me start with some second quarter highlights. closing the Great Western transaction in early May. Let me extend a sincere thank you to all the PDC and Great Western employees who helped successfully complete and integrate this scale-building, highly accretive transaction. For the quarter, PDC generated $405 million of free cash flow, or a 26% annualized free cash flow yield. Shareholder returns for the quarter were $250 million, $215 million in share buybacks, or 3 million shares, and $35 million in fixed dividends. Second quarter shareholder returns calculate to a 16% annualized return. The company has made tremendous progress obtaining permits in Colorado. I believe our regulatory team has actually cracked the code as 99 new permits were approved in June alone. And I am happy to announce just two days ago, PDC received completeness determination from the COGCC on the Gwinella cap. Today, with approximately 650 ducts and permits in hand, the Wattenberg team now has a turn in line schedule mapped for the next four years. And with our Gwinella cap, Another 450 wells are on target for approval later this year. Once the cap is approved, our turn in line schedule will be mapped into 2028. I want to thank the land and regulatory teams for the tremendous momentum we have gained in the permit process. A quick update on ESG for the company. Admission reduction projects are on track to support our year over year goal to reduce methane emissions by 30% and greenhouse gas emissions by 15%. We also have direct line of sight towards achieving our 2025 emission reduction goals. From a safety standpoint, I'm very proud of both districts. Four years with no lost time injuries in Texas and Colorado, an exceptional record. I want to thank the operating team for continued focus on safety. And on the community side, PDC has already contributed contributed nearly $2 million to charities across Texas and Colorado, with plans to give another $1.5 million by year end. And it doesn't stop at the wallet. Employee volunteer time at over 100 organizations should total over 4,000 hours for 2022. As I close out my comments today, let me address the second quarter production shortfall. As we navigated the second quarter, a few unanticipated challenges emerged. These are impacting both second and third quarter production, and I'll let Dave give a lot more detail on this in a moment. But let me assure you, these are short-term, correctable, and they are getting the full attention of our engineering and production teams. The outlook for PDC remains incredibly strong. Our capital programs are on track. Our drilling projects are well mapped for the next several years, delivering substantial returns for our investors. Great Western should be fully integrated by mid third quarter, and we anticipate operating costs for the company will begin to fully reflect the strong benefits of the scale building transaction by year end. As we wrap up 2022, we anticipate having repurchased approximately 10% of our outstanding shares. delivering mid-teens total shareholder return yield, paid a substantial special dividend near year-end, fulfilling our commitment to return 60% plus annual post-dividend free cash flow to our shareholders, achieved our ESG and emission reduction goals, and mapped our turn-in-line schedule with permits in hand through 2028. What I consider an incredibly strong story. So with that, I'm going to turn the call over to Dave Lillo for more operational comments.

Thanks, Bart. Before moving to the operational highlights, I want to thank our team for their efforts and hard work on their continued successful integration of the Great Western asset. And with that, jumping to slide six, during the second quarter, we invested $290 million, which was at the high end of our guidance range. This was a result of continued pressure on service costs and pass-through items such as labor, diesel, steel, and chemicals. Overall, across our operations, we are seeing approximately a 5% increase in the cost of services since the last time we provided you an update in May. Total production for the quarter came in at 21.4 million BOE or approximately 235,000 BOE per day. The oil production was 6.8 million barrels or approximately 75,000 barrels per day. Our production came in lower than guidance as a result of a number of compounding short-term operational constraints, including timing of moving a 35-well Great Western rain dance pad to gas lift and the timing of temporary planned and unplanned maintenance on third-party midstream systems in the Wattenberg Field. We also had delays in securing work over rigs in the Delaware Basin. To provide more context around the Great Western Rain Dance Pad, I would first like to note that this is our largest pad on production for PDC. And as our operations continue to scale and we move to larger pad sites, there will be more variability in our quarterly production due to timing of when wells are brought online and associated shut-ins of nearby completion work and maintenance activities. As part of the normal operation in lower GOR sections of the Core Wattenberg, the team appropriately accelerated the move to gas lift on the rain dance pad to optimize fluid lift and production. In June and July, these wells were worked over to install gas lift equipment downhole requiring an increased number of adjacent wells to be temporarily shut in due to the tighter design of surface spacing of the Great Western wellheads. Initial production response from these wells where gas lift has been installed and brought back online are meeting expectation and currently support longer-term production forecasts. We expect to move the remaining wells to gas lift in October. The efforts of this work have been considered for our second half 2022 production guidance that Scott will address in his remarks shortly. In Delaware, we have one full-time drilling rig operating and finished our planned completion activity for the remainder of 2022. During the quarter, we experienced delays in securing a second workover rig in the Delaware Basin due to the ongoing tight service market. We were able to ultimately secure another rig at the end of the quarter, and recently, the team has been able to secure an additional third workover rig to dedicate to our inventory of projects. Moving to the cost side of the equation, we maintained great focus, remaining disciplined on managed costs in a tight market. Our LOE for the third quarter was $3.30 per BOE. An all-in G&A expense exclusive of 61 cents per BOE costs associated with Great Western acquisition was Now moving to slide seven, we are encouraged by the process of securing additional permits in Colorado. In June, PDC was granted unanimous approval for the Kenosha and the Bro oil and gas development plans. Our second and third approval under the new permitting process. Combined, these two approvals provided the company approximately 100 additional permits. You can see from the representative turn in line inventory shown on this slide that with the ducts and permits we have already in hand, there is good visibility into our next four years of activity at our current pace and development. And the expected approval of the Gwinella cap later this year Our inventory, our turn in line inventory extends well beyond 2028. And over the coming months, the company also expects to submit several additional OGDPs expanding its inventory of permit locations to support the most efficient development of the core Wattenberg field. Finally, slide eight, I want to give a an update on our Gwinella comprehensive area plan and where we sit in the approval process. On August 2nd, the company passed a major milestone in the permitting process by receiving the completeness determination on the Gwinella cap from the COGCC. The Gwinella cap covers approximately 35,000 consolidated net acres in rural Weld County in approximately 450 locations and 22 surface locations. With the completeness determination passed, PDC now enters the technical review phase and a 60-day public comment period. It is important to note that not only does the Gwinella cap maturely extend our runway for our operations, but it also provides and aligns with continuous progress on the ESG efforts that Bart highlighted earlier in the call. We plan to P&A 300 existing vertical wells within the cap boundary, move 100% of our oil, gas, and produced water on pipe, and further reduce noise and emissions by having 100% electricity power on every location. And in the last 24 hours, I'm pleased to announce the tentative hearing date has been scheduled for December 7, 2022, in front of the Commission. With that, I will turn it over to Scott Myers.

Thanks, Dave. As Bart and Dave highlighted, the first half of the year has been operationally solid despite some short-term issues relating to the timing of maintenance events and service crew availability. Before discussing the financial highlights of the quarter, I want to start on slide 10 by providing a brief update on guidance as it will provide context to some of the data we'll show later in the slide deck. For the second half of the year, we expect total production to be in the range of 245,000 to 255,000 BOE per day and 80,000 to 84,000 barrels per day of oil production. Capital investments in crude oil and natural gas properties are expected to be between $515 and $565 million. This represents an approximate 5% of additional expenses as we are seeing related to inflationary pressures that Dave detailed earlier on the call and some small changes as the second crew, completion crew, is now expected to start September instead of early October. Based on our current operating results in the first half of the year, we now expect full year 22 production to be in the range of 230,000 to 240,000 BOV per day, of which 73,000 to 77,000 barrels are expected to be crude oil. As our Plan 22 capital investment in crude oil and natural gas properties are expected to be between $1.025 and $1.075 billion. What I want our investors and investment community to take away from this guidance is that our robust free cash flow and shareholder return programs are strong and intact. I'll spend the next few slides highlighting some of these points in context of our quarterly results. Moving to slide 11, you'll see operations again result in significant cash flow generation. We enjoyed a pre-hedge realized price of approximately $58 per BOE, while operating expenses came in under $9 per BOE. Our G&A, as expected, was approximately $1.50 per BOE, net of the 61 cents per BOE cost associated with Great Western Acquisition. This allowed us to generate $695 million of adjusted cash flow from operations, and after taking into account 290 million of CapEx, we generated more than 400 million of free cash flow during the quarter. This equates to an annualized free cash flow yield of 26%, higher than most, if not all, of our E&P peers. We remain committed to returning 60 plus percent of our post-dividend free cash flow to shareholders via systematic share repurchases and a special dividend For the first half of the year, we have generated nearly $725 million of free cash flow. Of that, we paid out $60 million in the form of regular dividends, bought back $300 million of our shares, and committed nearly another $100 million towards additional shareholder returns. For the full year, we are on track to generate $1.6 billion in free cash flow. After paying $125 million for the base dividends and accounting for our 60 plus percent shareholder return target, we anticipate approximately $885 million to be available for share repurchase program and special dividend. Finally, as you can see on the slide, we are now looking at potentially repurchasing more shares this year as our stock price is trading at a lower than expected multiples. As we spend more on share repurchases, our anticipated year-end special dividend may decrease. However, the total shareholder returns are still whole. Moving to slide 12, I'd like to highlight a few additional details on our shareholder return program. First, our estimated 22 annualized shareholder return yield is approximately 16%. As planned, we raised the quarterly dividend to $0.35 per share after closing the Great Western acquisition. As part of our systematic and opportunistic plans, we repurchased approximately 3 million shares or $215 million through the share buyback program in the second quarter alone. Again, look for the third quarter to be another strong share buyback quarter for PDC at these prices. As you can see in the chart in the lower right-hand side of the slide, we have returned nearly $360 million through the first half of the year and are on track to accelerate that activity to approximately $1 billion inclusive of a potential special dividend by year end. Depending on market conditions and the number of shares repurchased and the total repurchase dollars spent this year, a special dividend between $2 to $3 per share to meet our 60% post-dividend shareholder return goal is projected. Finally on slide 13, I want to draw your attention to the quality of our balance sheet today and directionally where we intend to end the year. At the end of the corner, we're at approximately $1.7 billion in long-term debt and a net leverage ratio of 1.7 times. In addition to our shareholder return profile, we anticipate having the opportunity to allocate free cash flow further reducing our borrowings under the credit facility and exit the year with approximately $1.3 billion of long-term debt and a leverage ratio of 0.5 times. Before we move to Q&A, I want to summarize our call by highlighting that PDC is poised to have its most successful financial year in its 50-year history. We remain disciplined in our approach of developing our top-tier asset base while continuing to build a company of scale that is capable of delivering sustainable free cash flow and material shareholder returns for the years to come. With that, I'll turn the call over to the operator.

Certainly. As a reminder, to ask a question, please press star 11 on your telephone. Please stand by while we compile the Q&A roster. And our first question will come from Neil Dingman of Truist. Your line is open.

Morning, all. Scott, maybe first questions for you. Specifically, you talked about third quarter could be heavy in buybacks, and I'm just wondering, given the authorization, how heavily could you lean into this? I know besides blackout periods, other restrictions, and I'm just wondering on a go forward, how you'll continue to balance that versus potential higher divs.

Yeah, no, that's a great question. I mean, clearly we were authorized by the board to buy back $1.25 billion in February of this year. So we've just barely started scratching that surface so far this year. I'd look for the third quarter to be pretty similar to what we did in the second quarter. With our systematic share buyback that buys it every day, we're just kind of messaging we're going to be a little bit more opportunistic. And we were previously guiding more to somewhere around that 6 to 625 for shared buyback. And we now are kind of leaning in a little bit and look for us to probably do more than half of that board approved program this year. So again, I think we threw in the range 625 to 675. It's not a major step forward, but it is leaning in a little bit more on the repurchase program. And as we go out throughout the year, if we still see the prices with this multiple discount, we'll consider continuing to increase that.

Great points. And then just lastly, Bart, on the prepared marks, you mentioned that some of the gaps with those issues, a bit more just timing issues there. Just wondered, do you all anticipate when you look at the portfolio now and examine, are there other pads that might, you know, other sort of the lower GOR pads that might need to be brought also on the lift? And, you know, while you're kind of talking about pads, could you also mention this, could you just talk about sort of typical pad size going forward, how much that's going to be increased?

Dave, you want to jump on this?

Yeah, I think going forward, typically on that rain dance pad, you know, we had 22 wells that Great Western fracked last year and turned them online in April. The team watched that very, very close. When we took over May 6th, we instantaneously moved a rig out there, started installing gas lift, And we were able to complete 12 of those jobs. We had some SUA that implied that we couldn't do a lot of the work between July and September. So we'll have to move back in October and finish up. We have 10 more wells to install gas lift on. So that will be an effect for the third quarter. And we've implemented that into our forecast as well at this point. Besides that, I think where the team is learning from our lower GOR areas that we've just recently taken over and have built plans around that.

Very good. Thanks, Nick.

Hey, Neil. As far as other Great Western pads right now, no. This pad was being... Literally, GW is just wrapping up their completions when we closed the deal and took over operations. Our operating teams obviously took over the production operations, evaluated the production, quickly realized that gas lift mandrels needed to be installed on the wells. Like Dave said, they had a tight window with the landowner to get in. We got as many done as we could. And then there was complications with how many wells we had shut in. But as far as other big pads, Dave, no. I don't think we have other in the low GOR. Again, this is 35 wells. This is one of the biggest pads. And the team made the right decision at the right time in mid to late May to take proactive action on optimizing long-term production on this pad. I just want to stress that.

Thanks for additional details, Bart.

And our next question will come from Yimeng Chowdhury of Goldman Sachs.

Good morning, and thank you for taking my questions. My first question is just on the production impact. Just to be sure, is all the production impact just a near-term impact in 3Q? It would be great if you can give a quick color in terms of how we should think about the cadence of production exiting the year and also probably for 2023?

Yeah, I would say when we look at our production, We're going to be fairly level for the next two quarters, maybe third quarter slightly higher. You know, we have Delaware production that is still going to be stronger in the third, and then it tails off in the fourth. But our Wattenberg production will kind of be doing the opposite as we get the rain dance fully up to operational capabilities in the end of October, plus the fact that we have our second quarter. completion crew coming in mid-September, you should start seeing some of those extra wells coming online in the November timeframe. Overall, pretty level between the two quarters, but you have the two basins going on a little bit different trajectory. When you look at 23, yes, we still have a strong outlook. In the prior outlook, we said more like zero to 5%. We're probably in the 5%-ish kind of line because when we get these wells engineered and back on the line, I think you're going to really see a pretty good kick up in the first two quarters next year as we start going through and the Delaware activity really starts kicking in again as it did in the second quarter this year. But overall, look for a 23 growth rate, probably in that 5% range, not very much different than we had before.

Awesome. Thank you. My next question is on capital returns, and I appreciate all the details which you provided before. Sounds like you might lean in a little bit more on share repurchase given the share price in the near term. But I was thinking about next year, with the leverage falling to $1.3 billion at the end of the year, how are you thinking about how much percentage of free cash flow post-dividend would you allocate towards a capital return program?

That's another great question. When we designed this program, we really wanted to emphasize the plus, so the 60% plus. We wanted to develop a program that's going to work through all the different cycles that PDC goes through in its history. I would just say when leverage gets lower, we could obviously lean in more on that shareholder return. We don't want to be a debt-free company. That doesn't make a lot of sense. It's an effective way to use capital. So the size that we are today, you know, you're not going to take your, you're going to get a debt levels down to, you know, 700, 850 million million in total. So there's not that much more debt to pay down in 23 and 24. So again, That's 60% plus. I'm not ready to come on an exact number right now, but look for us to be, as leverage gets lower, we can return more capital to our shareholders for sure, and that's the way we designed the plan. So for a particular number, what we're going to do for 23, you'll have to wait until we finish the 23 rollout of the budget in February next year.

Great. I appreciate the details. Thank you.

And our next question will come from Michael Ciala of CIFL. Your line's open.

Good morning, everybody. I wanted to see if the Inflation Reduction Act gets approved here and becomes law, what kind of impact that might have on PDC, in particular with methane emissions, if there's a methane emission fee attached to the bill.

and any other aspects that would be positive or negative for the company or the industry for that matter yeah mike um let me uh let me give a soft answer on this one it's it's early in the game uh nikki and uh our trade associations are keeping a close eye on this but i think it'd be premature for me to even try to speculate the impacts um i'm literally just still trying to understand what's in the bill so We're keeping our eye on this, and we've got AXPC full court press over at Congress trying to understand the pieces and parts that have influence on this. But give us a little more time before I can comment.

Okay. Understood. And then, Scott, you talked about next year with the plans you have for free cash flow. you know, over the next six, 12 months, there's not going to be much to do with debt. I'm just wondering with the market kind of looking like it's pricing in some fairly high degree that there could be a recession. Is there any thought on maybe building a cash balance or I guess what level of cash balance are you comfortable with going forward?

Yeah, I mean, if we had a couple hundred million in cash in the balance sheet, that would not bother me at all. I think the first thing is to pay off our credit facility. There's no sense of paying interest when you don't have to do that. So we're going to get the credit facility paid off by the summer of next year based on our forecast. And then we'll go from there. And from that standpoint, we do have the 24 bonds that we'll probably have to look to address the take care of those in the latter half of 23 or early 24. So, yeah, we could have a little bit of cash in the balance sheet. I'm not worried about stacking 100 or 200 million, but I think that would probably be more towards the end of 23, 20, early 24 before you'd see that materially happen as we have the ability to pay off all the stuff on the credit facility first.

Got it. Thank you.

One moment. And our next question will come from Aron Jaram of JP Morgan. Your line is open.

Hey, guys. We wanted to get just some general thoughts of the six MBOE a day, like decline in your oil outlook. How much of that was driven by rain dance? versus the other two items in the Delaware, as well as the midstream issue? Just maybe help us think about them. Just trying to think about implications for 2023, because I think your previous outlook was low single digits growth, and I just wondered if we based that on the updated guide.

Yeah, I think that's a fair question. I mean, the rain dance pad is one of our most oily pads. I want to say it was around 70, maybe a little bit more, 70% oil. So a real strong economic ad. That's why we want to get it to its optimal production as quick as possible. When you look at some of the work over opportunities that really affected some of our new wells, as we're having this massive production, you have to clean those wells out. And all of those new wells in Delaware are 50 plus percent oil. So unfortunately, where those two hits, which were our two largest reductions in the second quarter, it tends to lead to a more oily percent of your production. And that's what you're seeing here. As far as when you go to, you know, 23 again, again, I think a 5% growth kind of rate is what we're looking at for all the commodities. I mean, when we look at Delaware, it's consistently in that low 40% kind of look at it. The Great Western that we're adding adds a little bit more oil than what we traditionally had. But we're starting to drill on, which are fantastic wells. We have a couple Plains wells coming on in about four months. And those wells are massive producers, but they're just more of a higher gas portion. And so that kind of has to all balance out. So I would still long-term look for PDC in total to be that low 30% kind of oil mix. I don't see anything changing that materially over the next three to five years with our production. I don't know, David, any other thing to add or Bart?

Yeah, Arun. It's a fair question, and I think you should look at it as kind of an equal blend of the three things that Dave outlined, being the rain dance, more than anticipated midstream downtime, and the procurement, particularly on the labor side, on work over rigs in Delaware. Midstream has rebounded, is running here the last couple weeks exceptionally well, working close with all our midstream partners for the balance of the year. The rain dance, I think Dave gave a full explanation on where we're at and then in Delaware, we've procured the work over rigs and we've got a good project list and our team's full steam ahead on correcting that. I think as we go through the balance of the year in the fourth quarter, you're going to see those three levels come back and then we'll exit the year probably somewhere around that 250 level for a company and then we'll have our growth on top of that next year. That's kind of a high level, but we don't have the exact numbers right here in front of us of each of these projects, but it was a blend of the three.

That's fair. And then, Scott, maybe just a clarification. Are you thinking about 5% growth off of the second half 2022 cadence? Obviously, that would include Great Western, or is that just off of the full-year numbers?

Oh, no, I'm sorry. really second half guidance or fourth quarter run rate, I think is the 5%. Yeah. It'll be larger on a total annual yield because we don't have the first four months of Great Western in our annual guide right now. Does that help?

That's super helpful. And then you guys mentioned that you plan perhaps to lean on the buyback a bit more. So I think you're targeting $625 million now. buybacks. Any order of magnitude here, leaning on this versus the special? Just trying to get some thoughts around that.

Yeah, I mean, we did, you know, our previous number was, you know, $625 million for the year. We were kind of thinking as our upper limit before. We did $300 in the first half of the year, which means the second half of the year has to be about, you know, 325, where we're sitting at today. You know, that's why we're kind of saying that 625, we would hope, would be more of a lower end of the limit right now. And so when you look at it, I think third quarter can be pretty similar to the second quarter. With this valuation where they are, we think it's a great time to be buying shares. And hopefully we continue to go and get this cap approved, and that will help with the with the multiple issues. So the remainder of this year, look for us to be strong, buying shares every day, and just leaning in when we have the open windows.

Great. Thanks a lot.

One moment. And our next question will come from Austin Alcorn of Johnson Rice & Company. Your line's open.

Good morning, Barton team. Thank you for taking my questions, and congrats on the next step in the Glenola cap.

Thank you.

I just have one question related to the granola cap. In the opening remarks, you said that the tentative hearing date is scheduled for December 7th. Do you see any potential roadblocks that could push the date back, or is that pretty set?

So we've worked very hard with the Oil and Gas Commission all along this whole process, and we've given them everything that they've wanted. We've submitted over a 2,000-page report to them on the application, so we've went through all the alternative location analysis, the environmental impact analysis, working with wildlife, working with all different communities. I think this is going to be a very successful hearing in December, and we have all the confident world on it.

I appreciate the color, and I guess as a follow-up to... To Arun's question, when he was asking about the workover delays in the Delaware, I believe you said that y'all had secured the workover rigs in the Delaware. I'm just double-checking to make sure I heard that properly.

Yeah, we started out the quarter, and we had one full-time rig. We were able to secure a second rig, but it was a delay in the Delaware.

I believe you said that y'all had secured the workover rigs in the Delaware. I'm just double-checking to make sure I heard that properly.

Yeah, we started out the quarter, and we had one full-time rig. We were able to secure a second rig, but it was a daylight only due to labor constraints. And we got on to one complicated project, which we had to devote time to. So we have a backlog of about 15 to 20 projects right now. We have secured a third workover rig, and the team has went ahead and – has highlighted the top priority projects, and we're going full steam ahead of catching up on some of those. They're mostly clean outs, gas lift installations, those type of projects that are very valuable to us.

I appreciate it. That's all from me.

Thank you. And our next question will come from Oliver Hoang. Your line is open.

Good morning and thanks for taking my questions. Just given the... Hello?

Good morning.

Just given the revisions back half the year outlook and that looks fairly one-off in nature, but also the inflationary pressures seen across the industry today, just wanted to get a sense for the confidence around being able to achieve the prior 2023 outlook for May on a free cash flow and if it's still a reasonable expectation.

Yeah, I mean, absolutely. I mean, we think we have a very robust free cash flow outlook for the next several years. I mean, from a production standpoint, we've already talked about that a couple of times. We see that 5% growth next year. You know, the inflation is a tough one. You know, clearly you've seen through this earnings seasons where these inflationary numbers have gone. So if you kept the prices steady, and our production next year is rather steady from what we were thinking before, but capital is a little higher, obviously it might put a little bit of a damper on some of your free cash flow, but it's still going to be a super robust program. So the next several years, look for us to be able to continue our shareholder returns and have a very, very favorable outlook when compared to the peers with our production.

Okay, that's helpful, Kohler. And for my second question, was wondering if you could remind us how many wells you're able to complete in the Wattenberg per crew, just given the continued improvements there. The updated 2022 budget seems to indicate in the 100 to 115 ballpark, but just want to make sure that sounds reasonable, just kind of given some of the work in progress wells that are flowing into the mix from Great Western.

yeah i mean it's it i'll just jump out it sometimes it depends on the length of the wells too and how many are there you know i say one completion crew 125 inch seems to be good that's why we have to have the second crew for half the year gives you another 50 to 75. it really depends on on the on the number and the length of the wells and when we tend to have longer wells, which is a lot more of our future, those numbers might come down a bit. But hopefully that helps. Dave, anything else? Is that fair?

Yeah, roughly. We're going to turn in line this year probably 150 to 160 wells, to answer your question, with the cadence that we're at right now.

Awesome. Well, thanks for the time, guys.

Thanks, folks.

Thank you. And our next question will come from Kevin McCurdy. of Pickering Energy and Partners.

Hey, guys. Hey, guys. Appreciate the commentary today so far on the buybacks. And sorry to press the point a little bit, but given that your free cash flow yield is around 30% and the stock is down today, why not commit all of your free cash flow for the 3Q buybacks and forego the special dividend? Are you somehow limited from doing this?

Yeah, I mean, there's some... There's some regulations, and when you're doing a buyback program, you can only buy a certain amount of your float a day. We want to make sure it's a systematic program, and again, we're really happy that I think we're going to have the opportunity to lean in here a little bit in the third quarter. We do favor the share buybacks, but given the public float we have, not wanting to move the market ourselves, I don't think it's realistic for us to use all of the all of the free cash flow or the return of shareholder dollars to go to share repurchases. But look for that, as we've shown on the slides, so that special is shrinking a little bit so we can do even more share repurchases, and we'll continue to monitor it. But I would say here, by the end of the year, I don't think we're going to be able to meet our commitment through share buybacks alone, so I still think we'll most likely have a special towards the end of the year.

Great. Thank you for taking my question.

No problem.

I would now like to turn the conference to Bart Brookman for closing remarks.

Yeah. Thank you, LaTanya. And thank you, everyone, for joining us today. Just in closing, I can assure you Dave and our operating terms have full court press right now on production rebounds. We've got a lot of good things going on in that arena, so more to come there. We have all the confidence in the team of getting this back.

This concludes today's conference call. Thank you for participating. You may now disconnect.