Good day, and thank you for standing by. Welcome to Civitas Resources First Quarter 2024 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you'd like to withdraw your question, press the star and number one again. Thank you. Please be advised that today's conference is being recorded. I would now like to hand the conference over to Brad Whitmarsh, Head of Investor Relations. Please go ahead. Thank you, Allie. Good morning, everyone, and thank you for joining us. Yesterday, we issued our first quarter earnings release, our dividend release, and a buyback announcement, along with our 10-Q, and we provided some supplemental materials. Hopefully, you've had a chance to review those items, which should all be available on our website. I'm joined today by our CEO, Chris Doyle, CFO, Marianella Foschi, and COO, Hodge Walker. After our prepared remarks, we will conduct a question and answer session. As always, please limit your time to one question and one follow-up so we can work through the list efficiently. We will make certain forward-looking statements today, which are subject to risks and uncertainties that could cause actual results to differ materially from our projections. Please make sure and read our full disclosures regarding these forward-looking statements in our most recent SEC filings. We also may refer to certain non-GAAP financial metrics. Reconciliation of these items to GAAP measures can be found in yesterday's release and in our SEC filings. With that, I'll turn the call over to Chris for opening comments. Thanks, Brad. Morning, everybody, and welcome to our first quarter call. 2023 was truly a transformational year for our company. Now, in 2024, this is the first quarter that all of our new businesses are put together. Our results highlight just the beginning of Civitas' bright future ahead. Today, we're benefiting from a scaled and more diverse portfolio, and our teams are finding innovative ways to drive capital efficiency. Here are a couple of key takeaways. First, our Permian team and assets are performing very well. Through successful integration, we're already reducing drilling and completion cycle times and lowering cash operating costs. Now, it's only one quarter, but I'm super excited about the results this team is already delivering. Next, our teams continue to optimize development of the DJ Basin, and we achieved our $300 million divestment target ahead of schedule. These divestments are accelerating value to Civitas, peeling away assets that simply don't compete for capital. On an annual basis, the $300 million of assets would have generated approximately $70 million of EBITDA at $75 oil. Now, connecting the dots here, these non-core assets traded at a material step up in value from where our remaining core assets currently trade. Importantly, the quality of our portfolio, our strong operational execution, and our confidence in achieving this year's targets will allow us to maintain full year volume guidance despite selling 5,000 BOE per day. This is essentially a 1.5% increase in our sales volume guidance for the year with no CapEx change. Also, during the quarter, we continued our strong shareholder return program, returning $215 million between our peer-leading dividend and share buybacks. Hopefully, you saw our press release yesterday announcing another share repurchase agreement, where we're buying back more than a million shares from Vitol, who's now down to under 2% of our outstanding shares. Since the beginning of last year, we've repurchased $462 million of our stock at $63.30 per share, and our total return, including dividends, is approaching $1.3 billion over that same time frame. That's approximately 18% of our market cap returned to shareholders in a little over a year. In addition to our capital return, we paid down debt in the first quarter, reducing our revolver borrowings by $350 million. Our first quarter operational financial performance drove a significant beat on both consensus earnings and cash flow. Sales volumes for the quarter were higher than planned, averaging 336,000 barrels of oil equivalent per day, and oil was 156,000 bbl per day, or 47% of total volumes. This was driven by strong well productivity, along with accelerated turn-in-line timing in both DJ and Permian. Cash operating costs were in the lower half of our annual guidance at $9.19 per BOE. LOE was the primary driver here, totaling $4.31 per BOE. Capital expenditures were $650 million, or approximately a third of our annual guidance. This was slightly higher than planned, but largely due to the acceleration of drilling completion activities in the Permian, as well as certain long lead items purchased for the DJ in the first quarter. As a reminder, we'll likely spend 60%-65% of our full year CapEx in the first half of the year. As we progress through the remainder of the year, our focus remains on maximizing free cash flow, enhancing the balance sheet, and returning capital to our shareholders as we build a long-term and sustainable business. Now, let me turn to some operational highlights. Starting with the Permian. We'll be investing about 60% of this year's capital in the Permian. We're continuing to show that assets are better in our hands. In today's supplemental slides, we provide a number of helpful comparisons that highlight this exact point. On the drilling side, we've increased average footage drilled per day by nearly 30% from prior operators, and according to third-party data, we drilled more footage per day per rig than any other operator in the Permian during the first quarter of the year. Of particular note, we recently drilled a 3 mi lateral in the Midland Basin in under 10 days spud to rig release. We've also had similar achievements on the completion side. Our teams have increased daily fluid throughput by 20%. Accordingly, cycle times are coming down, as are D&C costs. So far, we've captured approximately 5% cost reduction on a per, per foot basis, and there's much more to come... also finding ways to lower cash operating costs. In the first quarter, LOE, we were more than a dollar below expectations, driven by ongoing field-level synergies, primarily labor-related, and the optimization of chemicals program, particularly in the Delaware. In March, we commenced production on a large number of new Delaware wells. Early production performance is in line with expectations. Production from these wells, along with additional TILs through the summer, should drive oil growth in the Permian through the year. The first wells, fully drilled and completed by Civitas, are anticipated to commence production in the third quarter. We continue to find ways to optimize our portfolio through asset trades, acreage swaps, and small farm-ins acquisitions. Our ground game has added valuable inventory, extended laterals, and increased working interest in near-term development. As a result of this success, we've now lowered our 2024 expected Permian well count by about 10, while still completing the same lateral footage as our lateral lengths have increased by more than 10%. Now, switching to the DJ. The highly prolific Watkins area comprises about 70% of our 2024 DJ investments. We continue to be encouraged by performance, and you can see on our slides how production continues to track well versus our recently uplifted type curve. During the first quarter, we completed 13 4 mi laterals in Watkins. These are the longest wells ever drilled and completed in the basin. These wells allow us to access additional resource while reducing surface impact, and we're looking forward to production results in the second half of the year. We have 320 remaining development locations at Watkins, the majority of which are covered by comprehensive area plans. The Box Elder CAP is approved and represents much of our 2024 and 2025 planned activity, and we're working on the Lowry CAP approval, which we expect to happen later this summer. Also, during the first quarter, we drilled our first U-turn wells in the DJ. It's another accomplishment in our strategy to maximize returns and resource development with longer laterals. Briefly, on the Colorado regulatory front, I wanna thank the governor and the legislature for their work to reach a compromise that will withdraw the competing ballot measures and in-process bills regarding oil and gas development. While the new compromised bills are not yet finalized, they're aligned with our emissions reduction commitments, and they raise important funds for low carbon transportation options for all Coloradans. Importantly, for producers, it provides certainty that the government will oppose any future ballot measure and any legislative attempt that would upend this certainty, at least through the 2027 legislative session. This is a win-win for all parties, including our shareholders, as it removes risk of near-term regulatory changes in the state into 2028. Wrapping up, our first quarter performance reflects the benefits of a high-quality portfolio and the team's ongoing ability to make the most out of our asset base. We're encouraged by the early efficiency gains and strong results we're seeing in the Permian, and the DJ Basin continues to perform exceptionally well. Civitas has all of the key ingredients to deliver long-term shareholder value: high-quality assets, inventory depth, a strong balance sheet, significant free cash flow, and a track record of returning cash to owners through cycle. Thank you for your interest in Civitas. Operator, we're now happy to take questions. We are now opening the floor for question and answer session. If you'd like to ask a question, please press star and number one on your telephone keypad. Our first question comes from Neal Dingmann from Truist Securities. Your line is now open. Good morning, Chris and team, and congrats on the nice quarter. My first question is really on the notable upside you all already seen on the Permian, and specifically, what I'd like to ask, Chris, is for you or Hodge, just on the well productivity in the play. It appears to be advancing very quickly. I'm just wondering, are there a few items... I know we've had a number of companies now with earnings this week talk about the well productivity and what's driving that. What's most impressive with yours is just a short amount of time, and so maybe you could talk about the type of drilling or completion upsides, you know, what we're seeing there and maybe future D&C upside the remainder of the year. So thanks for the question, Neal. You know, it's very easy, and what we've done is point to very notable capital efficiency gains, drill times, cycle times, turn-in-line cycle times. All those are hitting on all cylinders. I think what's not necessarily out there quite yet is what this team's doing in terms of how we're developing this resource. And to your point, there is additional zones of interest uphole in the Delaware. We've talked about the Wolfcamp D in the Midland. The reason that we targeted entering the Permian is exactly what you pointed to. There is tremendous resource up and down the hole. We're testing those zones. Some of those zones, candidly, while they're upside, we did not underwrite value for these acquisitions. We're seeing how they perform. That will inform how we allocate capital going forward. I'll say we're very excited by early results that we're seeing in many of the secondary zones, and that will have impacts on how we allocate capital going forward. Great point. And then, Chris, since you've come in, you've done a tremendous job, not only doing what you're, what you were going to say, but, but it just, just on the shareholder return. And I'm just wondering now, when we look at sort of Civi going forward, do you still think sort of the flat growth makes the most sense now that you've got these, you know, high return Permian assets to go along with the DJ assets? Maybe just talk about what you think, what strategy you believe is still best, for shareholders going forward. Yeah, and I would point to the collective at Civitas really executing on this business model that was put in place at formation in November of 2021. We think it still makes the most sense long term, not to focus on production growth, but focus on cash flow. Focus on maximizing free cash and returning that to shareholders. Now, some years, that may mean a little bit of growth, whether you saw that early in 2022 when service costs weren't necessarily aligned with commodity pricing. You saw the run-up in commodities, so what did we do? We accelerated, and we grew production. The flip side was true as well in 2023, where there was a mismatch, and we pulled activity back. Again, this is about how do you, how do you maximize shareholder value over the long term? And I would say right now, there's still a lot of flux in the system, and this is—that's why it's a difficult question to answer for us right now as we stand up operations in the Permian. So much of that capital efficiency equation, so much of, of what this team can deliver and what these assets will deliver, is still yet to be determined. I think what's truly exciting for our team is, you know, there are a lot of folks that, that wanted to see us execute, that wanted to understand, could we integrate, three new businesses in the Permian and, and, and not stumble? And look, again, it's one quarter. We're not spiking the football or anything like that, but we're super proud that this team has started out of the gate as strong as we have. I think what you'll see year-over-year is likely to be broadly flat production, and how do we peel out as much capital as possible? Now, I will say another hallmark of our board and a hallmark of our executive leadership team is that we are always in the lab trying to figure out how to improve our business. And if that means we grow a little bit, we'll look at that as a potential option. My gut is it's going to be broadly flat production, minimized capital. I think that makes the most sense. Thank you. Thanks, Neal. Question comes from Tim Rezvan from KeyBanc Capital Markets. Your line is now open. Good morning, folks, and thank you for taking my questions. I wanted to start first, I guess, you know, the Colorado legislative news, obviously a really big deal. Can you give any more insight on, on the timing when we, you know, is that, like, how it works, being sort of passed through the legislature, right now? And then, and then while we're talking about timelines, can you give any more details on what you think for the Lowry CAP and then the third CAP in Colorado? Thank you. Hey, Tim, this is Hodge. With regards to the legislation that you referenced, that legislation is moving through right now as we speak. The session ends here next week, so expectation is that we'll move through the process and get voted on here by the end of next week. As far as the application, as I think you might be aware, there's a sliding scale that's associated with pricing on oil and gas separately. That sliding scale will go into effect in 2025. One of the benefits of this discussion and this compromise is really through the work of the governor, the legislature, ENGOs, and the industry. And in the governor's announcement on Monday, three companies were named, and we were one of those companies. Through the work that we've been doing over the last few weeks, what we've agreed to through this compromise is that the governor and the legislature have stacked hands to say that there will be no negative legislation. They'll come out against legislation and ballot initiatives that have a negative impact on this industry, and that's through the legislative session of 2027. So for all intents and purposes, that clears until the 2028 legislative session. Lowry CAP. Oh, on Lowry CAP, we're expecting Lowry CAP to be moving through this summer. And then the next one is our Arapahoe CAP, and that'll be probably the end of this year, beginning of next year. In Lowry CAP, we've got a scheduled June hearing, so we're feeling good about that. I think the only thing I'd round out, you know, this the sliding scale at current price, about $0.60 a barrel of oil, about $0.015 for gas. If you apply that to our production stream over the entire Civitas production stream, it's about $0.25 a BOE. And hell, we've made more than that, peeled more than that out of LOE in the first quarter. Now, we're not happy about paying additional taxes, but we are happy about building a coalition that shows the importance of this industry in this state and removing regulatory uncertainty for the foreseeable future. As Hodge mentioned, as we work the Lowry through the process, we roll Arapahoe CAP through the process. We have real line of sight to developing one of the great resources in the DJ over the next three, four years without that overhang. So we're excited and happy to work together with the governor, legislators, and NGOs to get this done. Okay. That's great color. Thank you for that. And then as my follow-up, I wanted to shift gears a little bit. I know you all have been out meeting with investors more this year. There's a growing debate out there about your differentiated, you know, dividend outlook. Obviously, repurchases have been in favor, and I know for you all, it's a little more complex issue because it is a sort of meaningful part of the comp structure that's been put in place. So, Chris, I don't know if you could put your director hat on and address this or if Marianella, you have some views. But just kind of curious what you're hearing from investors on repurchases versus this differentiated dividend? ... and maybe how the board is sort of thinking about this going forward now that you've, you know, you're digesting these acquisitions. Thank you. Yeah, I'll kick this off, and then maybe see if Marianella wants to smooth out the edges. You know, this is an executive team that's very well aligned with shareholders. And so this is a debate that we have internally to say nothing of what we hear from investors. You know, at formation, we felt like it was important that the commitment to getting cash back to shareholders was real. And I think what I'm really proud about is, as a company, since November 2021, we've really lived up to that commitment. Now, the really interesting thing, in my view, is because of the strength of the assets, the cash flow generating power of these assets, we've been able to really deploy an all-of-the-above strategy. And so we've been able to hit the dividends at the same time, deliver on buybacks, and in tandem, return a significant portion of our value back to shareholders just over the past couple of years. It's something I would say we consider as a capital allocation decision, and so it's something that the board debates. It's management will continue to debate it. To this point, we've had the strength to be able to do all of the above, but it is something that we evaluate. Hey, man, I would add that the, you know, as you know, we've been in the conference circuit out a lot over the last 45, 60 days or so. I'd say the feedback from the buy side in general has just been the flexibility in our capital plan. As you know, how do you think about committing to returning a certain percentage of our cash, you know, just in dividends versus thinking about a more flexible framework? I would argue that based on our balance sheet, based on our, the strength of our cash flow, and based on the caliber of our asset base, we do retain that flexibility, right? And you've seen us do a lot of everything. Consistent with the comments we made last quarter, I think it's important to remember that, you know, we continue to return cash through the cycle. We definitely want to position our company to do that over the long term. If you look at what we've done to date, we have an extremely strong track record of doing that, as good as anybody. Going forward, you can expect us to continue to execute on that. We like our all-of-the-above philosophy. We believe the strategy has served us well. On the buyback front, you've seen us do a lot of that, certainly over the last couple of quarters and even more so our last 16 months. We'll continue being opportunistic and countercyclical. You know, one thing you know very well is this industry is full of examples of companies that buy back their equity at the wrong time, right? You know, some of the frameworks out there that are just leverage-based, that just by definition, they because your leverage would be low on higher commodity prices, and that's where your stock would be high as well, you just get yourself in trouble with buying at the wrong time. So from our perspective, we have a $330 million authorization outstanding. We're extremely in the money in terms of the weighted average price we've repurchased those shares at, and we will continue being opportunistic. You know, we're gonna be patient, and there will likely be some lumpiness in how we deploy the remaining authorization as a result. Okay. I appreciate the comments. Thank you. Our next question comes from Bill Janela from Mizuho. Your line is now open. Yep, thank you. Good morning. Chris, I wanted to ask one more on the Colorado fee proposal. I know you've been very involved in the process here, so I'm curious if you could give us a sense of where that bill stands in terms of legislative support, if you're seeing any opposition to it coming in from anywhere, and how likely you think it is to be passed when that vote happens next week? I would think that removes a pretty big headwind for your stocks, certainly for the next three and a half years. Yeah. Thank you. Thanks, Bill, for the question. Really, it's a tip of the cap to Hodge and his team. We've been involved over the past few weeks. It was critical, and the governor, I will say, did a good job making sure that both sides of the aisle within legislature, the NGOs and industry were together and ready to shake hands on we can go forward with this. So we believe that it will work through the system that that coalition was developed over the past few weeks with an agreement that works for all. I think importantly, and you know, our industry brings in a lot of tax revenue for the state and to individuals, and a lot of our dollars go into hitting local communities in a very, very positive way. I think what this tax does, and the governor was very clear, that it starts to build a coalition at the state level. And when you fast forward to the legislative session of 2028, as the state will be looking to balance its budget, now all of a sudden, an extremely important industry within the state in terms of jobs and tax revenue, also has this additional fee. And I think we'll strengthen the coalition. Now, will there be noise four years from now? Probably. But this, I think, will go a long way to really strengthening the ties between the state of Colorado and this, the great industry that we're blessed to work in. It's very helpful. Thank you. Thanks, Bill. Question comes from Oliver Huang from TPH. Your line is now open. Good morning, all, and thanks for taking the questions. On the ops side, it seems like the efficiencies have come in a bit faster than you all would have envisioned, which looks to be pretty much across the board, which is good to see. Just wanted to kind of see if there's anything else that we should be keeping on a radar for that could drive further efficiency gains in the near term, and any initial takeaways on kind of getting the Vencer side up to the same speed of the Hibernia assets, just kind of given how you all had the keys to that one for a few extra months? Assuming it'll just be a bit more expedient if you're not already there, but just any comments there would be helpful. Yep, we're there. You know, we had TSAs for the covered all three of the transactions. We exited the TSA with Vencer late last month. And so this is real-time news, but these assets are all in our hands. I think to your point, we saw some real encouraging results towards the end of the year as we're pulling our budget together. We rolled in some of those efficiency gains into the 2024 plan. But to your point, we did not anticipate, nor did we assume that this team would hit the ground running. And again, I wanna reiterate, this is only one quarter in, but the DNA of this team that we've pulled together in the Permian is so much like the team that we have in the DJ, super hyper competitive. We want to lead industry in both basins that we're operating in. And I'm just so proud to be a part of a team that has been able to knock down those results as quickly as they have. I think as we go forward, and into the next quarter, the next couple quarters, as we continue to gain confidence in our ability to extend laterals and drive cycle times down, if the first quarter is any representation of what we're gonna see in the next three quarters, we're gonna have some decisions to make on, do we want to redeploy some capital to the drill bit, and potentially increase going into 2025? Do we want to extend inventory through our ground game, or do we want to get that cash back to shareholders? I think it's gonna be a fun discussion to have because any of those three options is a win for our shareholders, and we're just super excited to see what this team continues to deliver. Awesome. That's helpful. Maybe a follow-up, just on the asset sales, good to see the completion of that mid-year target on the divestiture front. Are you all pretty much done on this front for the time being, or are there other assets that kind of remain within the portfolio, which you might look to kind of prune to bring some more value forward? Yeah, I think, you know, with this executive team and the broader team, I don't know that I'd say we're ever truly done. I think we are always looking for ways to optimize shareholder value and how to optimize our portfolio. And sometimes that will mean assets are more valuable in others' hands. It was important for us when we announced the first two transactions to say, "Look, we're essentially about to double the size of the portfolio. Let's make a commitment to ourselves and to our shareholders that we're gonna take a hard look at what is core and what is non-core, and commit to hitting $300 million by mid-year." To be able to do that, ahead of schedule and honestly, at a value for non-core assets that I would have taken the under on a year ago, is again a testament of a very capable, very strong team. So I'd say we will continue and always look at ways to optimize our overall portfolio. But I will say that we're happy with what we've achieved and excited to get this behind us. Oh, and I'll also add that for us, like Chris said, our focus is to create shareholder value, if there's an opportunity to do that. I mean, a lot of the non-core, just further back in the schedule of stranded acreage, you know, we can use that to sell it, right, as like we did, but we can also use it to trade it, right? And Chris alluded to the ground game. I mean, I will say that that is an incredibly huge opportunity for us to create value, and I'll give you an example. I I mean, some of the trades we recently did in the Permian, specifically, we traded into net more acreage that allowed us to extend laterals. And you saw about a 10 gross load decline in the count for this year, but that was for extending lateral lengths from 2 mi- 2.2 mi. That trade, just to put it in perspective, that was 4 million BOEs of proved reserves that we got for zero cost. And so if we can do that for no cash, I mean, imagine what we could do with some cash, which is... This is all within part of our budget. But just wanted to underpin that because it's something that we don't spend a lot of time necessarily talking about, but it's creating a lot of value just behind the scenes, if you will. Makes sense. That's great to hear. Thanks for the time, guys. Thanks, Ol. Our next question comes from Steven MacCurdy from Pickering Energy Partners. Your line is now open. Yeah. Hi, it's actually Kevin MacCurdy. Yeah, yeah, I would agree, you got a pretty healthy price on those asset sales. In fact, it looks like you sold those assets at a higher valuation than where your stock is currently trading. But my question is on efficiencies. You brought online more wells than we anticipated, specifically in the DJ Basin. You talked about balancing growth and free cash flow, but I guess at what point does it make more operational sense to keep activity steady, which, you know, could be an acceleration of your capital plan? And is that a decision that's driven by cost or commodity price? Yeah. Thanks, Kevin, for the question. I think you're hitting on a key part of how you ultimately drive capital efficiency, and if you're yo-yoing activity, sometimes that can be difficult. We did accelerate activity in both basins, actually, because it was a more efficient use of capital. And so it created a little bit of lumpiness and pulled some capital into the first quarter. ...In many respects, you know, the level set activity across both basins will lead to the most efficiency gains. I think in the Permian, the issue that we have right now is you have a team that is rapidly changing the equation by peeling out days on the drilling side and completion side. All good things, but it is leading to a little bit of lumpiness. I would say that we look at this on a continual basis, and whether that is, and we're gonna level load and keep things flat and just see if we can run harder that way, or if we can-- or if we add in a little bit of lumpiness. Whatever is the best, most efficient way to generate cash flow and get that back to shareholders is what we're gonna do. Great. That's the only question for me. Thank you. Thanks, Kevin. Comes from Leo Mariani from Roth MKM. Your line is now open. I wanted to follow up a little bit on the regulatory environment here. Obviously, good to see that there's a compromise between NGOs, the legislature, the governor, and industry here. But just wanted to kinda clarify a couple of things. So I know there was a bill going around that essentially would put some kinda summer stipulations on you know, sort of largely on frack activity, and just wanted to verify that that's gonna be you know, going away as a result. Maybe it already has. I don't know if it passed any committees. Then just with respect to, you know, ballot initiatives, I'm not an expert in Colorado civics or anything like that, but presumably, you know, there could still be groups that could put forward a ballot initiative, I think, under the current kinda rules. You know, the state, certainly, I guess, the governor can oppose it publicly, and legislature can oppose it publicly. But isn't it just a matter of having kind of enough signatures at the end of the day, and kinda getting that approved by the right agencies in the state, where there still could be anti-oil and gas, you know, ballot initiatives? Just wanted to get some more color on that. Hey, Leo, this is Hodge. Thanks for the question. With regards to the one legislation piece that was out there, that had the potential for the pause during the summer, that has been... That is a part of this compromise and will be pulled down as a part of this broader compromise. So that is in motion as we move through this legislative session. Good question on the ballot initiatives, and to your point, you know, from the position, people can bring forward ballot initiatives. Part of what we've agreed to with this broader discussion, not only with the governor and the legislature, but also with the NGOs, is that we are going to stand down the ballot initiative efforts, meaning them being bringing forward ballot initiatives against the actions of this industry, and quite honestly, the industry putting some countermeasures out there. So that is a part of the broader agreement. To the same point, having the governor come out and say that he's against these types of ballot initiatives, gives even more strength behind this compromise and agreement. Okay. No, I appreciate that. And I guess just on well costs in the Permian, I just wanna make sure I understood the comments correctly. I think you guys said that you're down about 5%, year to date on D&C costs per foot. Obviously, that's great progress here in one quarter. Just wanted to verify, is that mostly just kinda related to efficiency gains? I don't know if there's any OFS changes in that number. And it sounds like you have a lot of momentum there. So, you know, that 5% reduction sounds like that can get a lot better, you know, during the year. Just wanna get a sense of where that might go in the second half. Yeah, Leo, this is Hodge again. To your point, 5% down, this is one quarter. We're very excited about where we are. I think we're seeing efficiencies faster than where we thought we would be at this time. But at the same time, we're doing a few high fives, but we're not spiking the ball. There's continuous work to be done here. We've got a team that is focused on and has a foundational DNA of continuous improvement. They're challenging themselves on how to do things safer, better, faster every single day. Most of the cost savings we're seeing here are attributed to operational and equipment that we're using. We've changed out some rigs, and we've added horsepower on our completions so that we can increase our ability to do work and do it in a timely manner, and we're shortening our cycle times associated with that. We are seeing some reductions in pipe costs, but the majority of the savings we're seeing here are around processes and equipment that we're using. Excited to see where this team's gonna go. We will continue to focus on continuous improvement, and we'll see how this progresses over the course of the year. Leo, the only thing- Okay, yeah, that's all. We haven't- Go ahead. We haven't rolled those savings all the way through our 2024 plan, and don't know where we will be a quarter, two quarters, three quarters from now, and I think that is going to provide tremendous amount of flexibility in terms of how we can redeploy that capital. I think there is a lot of noise in the system. We're being conservative, rightfully conservative, because it's early to Hodge's point, but super excited about what this team is already delivering and more excited to see what we can talk about next quarter and the following quarters as well. Yeah, I know. I appreciate all that color. I know it can be hard to quantify the future, but definitely sounds like you're confident those costs will be lower, in the second half. ... Thanks, Leo. Our next question comes from Phillips Johnston from Capital One. Your line is now open. Hey, guys. Thank you. Most questions were asked and answered, but I'll just leave it with two quick housekeeping questions. First, do you guys have any material infrastructure needs over the next, you know, 12, 18 months? And then secondly, NGL realizations were stronger than I would have expected in Q1 at about 30% of TI or so. That's, you know, towards the high end of your annual guidance range. I, I realize the range is unchanged, but can you maybe talk about the dynamics there and what your expectations are for the rest of the year? Sure, Phillips. I'll, I'll address your first question, and let me know if it's not what you're trying to get at in, in terms of infrastructure, in, in gas takeaway, Permian-wide, specifically. So everything that we think we need to, to spend is, is in our budget, right? I would say from a, from a Permian takeaway perspective, we have two very supportive, strong partners, and, you know, those, those partners have their budgets for, for what they believe they need for infrastructure for this year. I will say to underpin that, over the last couple of quarters, we've seen planned and, and unplanned maintenance in some of the plants down there, and we really haven't seen any impact on flow. Obviously, we felt the pricing impact on, on Waha widening, but, but no constraints itself. I... This just speaks to the strength of who you partner with, right? You know, Targa, Enterprise, again, just the two largest processors of gas. They really provide a lot of flow assurance in that regard, just because both entities just need their Y- grade for their frac complexes and export docks downstream. And so from our perspective, after these three acquisitions, we just have very limited exposure to some of the smaller processors, that, to your point, like, a lot of times just pass on some of those infrastructure budgets to their producers. And then on your second question on the NGL realization, that did strengthen quite a bit quarter-over-quarter from Q4. A lot of that is related to the fact that, you know, if you think about the propane seasonality in Q1 that we saw, which is about 30%-40% of our product mix, a lot of that is what drove those higher NGL realizations relative to Q4. Okay, perfect. Thanks so much. Thanks, Phillips. We don't have any questions as of the moment. I'd now like to hand back over to Brad Whitmarsh for final remarks. Yeah, thank you. Appreciate everybody joining us today for the Civitas call. We continue to look forward to sharing our continued progress on upcoming calls, and certainly, we'll see you all at the conference circuit here in the second quarter. Hope you have a great rest of the day and a safe weekend. Thank you everyone for attending today's call. We hope you have a wonderful weekend. You may now all disconnect to this session.