Good morning, and welcome to Permian Resources' Conference Call to discuss its First Quarter 2025 Earnings. Today's call is being recorded. A replay of the call will be accessible until May 22, 2025, by dialing 888-660-6264 and entering the replay access code 27785, or by visiting the company's website at www.permianres.com. At this time, I will turn the call over to Hays Mabry, Permian Resources Vice President of Investor Relations, for some opening remarks. Please go ahead, sir. Thanks, Angeline. Thank you all for joining us. On the call today are Will Hickey and James Walter, our Chief Executive Officers, and Guy Oliphant, our Chief Financial Officer. I would like to note that many of the comments during this call are forward-looking statements that involve risk and uncertainties that could affect our actual results or plans. Many of these risks are beyond our control and are discussed in more detail in the risk factors and the forward-looking statements of our filings with the SEC. Although we believe the expectations expressed are based on reasonable assumptions, they are not guarantees of future performance, and actual results may differ materially. We may also refer to non-GAAP financial measures. For any non-GAAP measure we use, a reconciliation to the nearest corresponding GAAP measure can be found in our earnings release or presentation. With that, I will turn the call over to Will Hickey, Co-CEO. Thanks, Hays. There is a lot we're excited to talk about today. We delivered another strong quarter, outperforming expectations in achieving the highest free cash flow per share in PR history, at $0.54 per share, driven by lower per unit cost and solid production performance. We did all this while strengthening the balance sheet with the highest liquidity, most cash, and lowest leverage in PR history. All the work we've done to date has put us in an incredibly strong position, not just to navigate the current market, but to capitalize on it. We have used this strength to start executing our downturn playbook already, with our first opportunistic share buyback and the announcement of a New Mexico bolt-on, both of which James will hit in more detail. Moving to Q1 performance, production exceeded expectations with oil production of 175,000 barrels of oil per day and total production of 373,000 barrels of oil equivalent per day. Our strong production performance is mainly attributable to outperformance from our 2024 acquisitions, driven by artificial lift optimization and stronger-than-expected well performance. In addition to wins on the production side, our operations team continued to drive down costs. Compared to Q4, we reduced controllable cash cost by 4% and DNC cost by 3%, landing at $750 per foot for the quarter. Strong production performance and further extending our Delaware-based and cost leadership resulted in adjusted operating cash flow of $900 million and adjusted free cash flow of $460 million, with $500 million of cash CapEx. Our outstanding operating performance and conservative financial strategy further enhanced our fortress balance sheet. During the quarter, robust free cash flow generation drove an increase in cash on the balance sheet from $479 million at year-end to approximately $700 million on March 31. We also redeemed $175 million in principal of the 9 and 7/8 high-interest legacy Erstone notes, which will save us approximately $17 million per year in reduced interest expenses. These actions reduced leverage from one times at year-end to 0.8 times at the end of Q1. We also highlight our updated credit ratings from BA1 from Moody's and BB Plus from S&P. With Fitch already at BB Plus, we are one notch away from our investment-grade goal at all three rating agencies. You will see in this presentation our credit metrics compare favorably to our investment-grade peers. Turning to slide five, when we started the predecessor company Colgate back in the 2015-2016 downturn, we built the company on a strategy of being prepared to play offense in any market. That mindset has benefited us tremendously in previous downturns and remains a core part of PR's DNA today. While we've been executing on an accretive consolidation strategy, we've also been pulling every lever to make sure we are ready for the next downturn. Since year-end 2023, we have decreased leverage to 0.8 times and increased liquidity to $3.2 billion, all while more than doubling the size of the business. Looking at our current hedge book, we have approximately 25% of 2025 oil production hedged at a price just above $73 per barrel. This hedging strategy allows PR to be more opportunistic during a downturn when investments can earn the highest return. In addition, our high-returning asset base and our ability to drive costs out of the business allows us to maximize cash return from every dollar invested. That is not just a talking point; it is material. At our current cost structure and consistent well performance, we can generate the same free cash flow this year if oil remains at $60 that we did last year at $75. Thanks to our strategy, our people, and our relentless execution, PR is in the strongest position in company history to operate effectively and create value through a down market. With that, I will turn it over to James to walk through our downturn strategy in more detail. Thanks, Will. We've discussed our views on balance sheet and cost leadership, but the third part of our strategy is opportunistically investing during the down cycle. If we step back for a second, we recognize that the oil and gas industry will always have volatility, and it is our belief that this volatility creates the potential for outsized value creation. We firmly believe that investments made during lower commodity prices drive greater long-term shareholder value. But to capitalize on that opportunity, you have to have both the balance sheet capacity and the willingness to deploy capital, which is the natural reaction to pull back. During times like this, our goal is to buy the highest quality assets with long-dated, low break-even inventory in the bottom half of the commodity cycle. And we've recently done that in two ways. First, with our buyback of PR shares in early April, and second, with our New Mexico bolt-on we announced yesterday. We will hit both of those in more detail now. Yesterday, we announced the $608 million bolt-on acquisition in New Mexico, directly offsetting and overlapping our existing acreage and operational footprint. This acquisition was entirely in Eddy and Lea counties and consists of approximately 12,000 BOE a day, 13,300 net acres, and 8,700 net royalty acres. The proximity of these assets to our legacy position will allow us to quickly and efficiently bring our peer-leading cost structure to bear on the newly acquired assets, further enhancing returns. This acquisition also adds over 100 new gross operating locations in our core operating areas that immediately compete for capital, while also materially increasing working interest in existing legacy PR units. In addition, the acquisition comes with another 4,500 non-op acres that provide the opportunity to leverage our highly effective ground game to maximize value through trades and further consolidation. The existing production has a lower decline than most acquisitions we have evaluated recently, but what really differentiates these assets is the quality and duration of the inventory. Strong well productivity combined with high NRIs and low development costs allow these acquired locations to break even as low as $30 per barrel. This combination of high return investments and low declines will allow us to maintain production with just a 35% reinvestment rate over the long term. We're excited about the opportunity to invest in our core operating areas at below mid-cycle prices and think the purchase price metrics reflect that value proposition. The $608 million purchase price implies an attractive value of approximately $12,500 per net acre and $6,000 per net royalty acre. This works out to about $2 million per net location, and all in, we expect the deal to generate in excess of 5% free cash flow per share accretion in the near term, midterm, and long term. We would like to reiterate that we have been maintaining a very disciplined and consistent approach to M&A during our seven years as a private company and nearly three years as a public company. As such, slide eight should be familiar to all of you. Given the high quality of our business today and specifically the depth of our low break-even inventory, the bar is very high when it comes to potential acquisitions. We are confident this acquisition exceeds all of our rigorous investment criteria. First, we've acquired these assets at an attractive valuation where we are highly confident we can exceed our returns thresholds. Second, this transaction is accretive to all key financial metrics. Third, this allows us to add very high quality inventory that competes for capital immediately in areas that we know well. Fourth, we're able to execute this opportunity while maintaining our fortress balance sheet and expect to exit the year with over $3 billion in liquidity and leverage below one times. Finally, and most importantly, we believe this transaction makes our business better and will increase free cash flow per share and returns to investors over the long term. We have a very long and successful track record of M&A that creates value for our shareholders, and we're highly confident that this transaction builds upon that. Turning to slide nine, we want to continue to emphasize that protecting the balance sheet is a key component of our long-term strategy. Pro forma for the New Mexico bolt-on, our balance sheet remains strong at current prices with leverage less than one times and a dividend break-even of approximately $40, comparing very favorably to our historical metrics and our peers. We are confident we have the dry powder to continue to execute on acquisitions or share buybacks in scale if additional opportunities were to arise. The final piece of our downturn strategy is opportunistic share buybacks, and we've been consistent and disciplined in our approach to buybacks since PR's inception. What we want to accomplish with buybacks is to increase ownership in our business in a cost-effective manner. To put it simply, we can buy back more shares with the same amount of money during a downturn when prices are lower. In a volatile industry like ours, we are confident that the dislocations and opportunities will always present themselves over time. Having prepared accordingly, we executed buybacks immediately during the period of heightened volatility in early April. In a relatively small window, we bought 4.1 million shares at an average price of $10.52. We want to use buybacks as efficiently as possible and will be ready to lean in during the next clear market dislocation. We are very fortunate that our team's focus on balance sheet strength has left us in a position to not treat buybacks or acquisitions as an either/or, but where we can execute on both in scale as opportunities present themselves in 2025 and beyond. Turning to slide 11, we're excited to roll out a revised plan where we project more production and lower CapEx than the original plan we rolled out in February. Our recent production outperformance allows us to reduce our capital budget by $50 million while maintaining production at the high end of our guidance range. This reduction in CapEx will come from a combination of reductions in completion and drilling activity in the second half of the year. As such, we still expect Q2 to be the highest CapEx quarter of the year with a step down in CapEx in the second half. As we have outlined for the past several years, our reinvestment and capital allocation decisions are very dynamic, and we adjust our plans to reflect the returns we anticipate in the coming environment. Our business remains highly flexible to react to the ever-changing macro, and we will continue to monitor all of the moving pieces and adopt a plan that maximizes long-term shareholder value. We believe this strategy will position us to further our track record of outsized value creation for shareholders. Thank you for tuning in today, and now we will turn it back to the operator for Q&A. Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press the star followed by the number one on your touch-tone phone, and you will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press the star followed by the number two. If you use a speakerphone, please lift the handset before pressing any keys. One moment, please, for your first question. Your first question comes from Neil Mehta with Goldman Sachs. Please go ahead. Good morning, James and Guy and Will and team. Just would love to build on your comments on the bolt-on in New Mexico. Just curious, how does this deal stack up against recent deals that you have done as you think about what it brings to the table? Spend a little bit more time kind of flushing out what you think might be underappreciated here. Yeah, no, Neil, great question. We're really excited about this deal. I think it fits with exactly what we're trying to do with our kind of M&A strategy, which is make our business better. I think as the markets evolve, one of the hardest things to continue to find is inventory that competes with what we've already got in our base business. I think that's, to us, the best part about this deal. We love the low decline PDP base. I think I mentioned in my prepared marks that the base declines here are lower than anything we've looked at in quite some time. What we really like here is the kind of higher weighting of the purchase price to inventory and the quality of that inventory. I think we haven't seen deals that have break-evens in the low $30s like this in a little bit of time, and kind of really excited about what it does. It really does compete for capital. I think we've got a great inventory base to build upon, and this fits great with our stack. In terms of what do you think is kind of underappreciated in the asset or from an operational standpoint, what's got you excited about it? Yeah, I mean, this kind of fits with what we've talked about for a while in our Parkway asset in Eddy County. I think what's been underappreciated by the market about this area is the oil productivity is strong, but I think what really differentiates this area from a rate of return perspective is just how low the cost structure is. I think what our team's been able to do in Parkway and Eddy County, we're kind of approaching Midland Basin level costs with what the team's doing out there. I think that really does help generate some of those outsized returns we referenced. Awesome. The follow-up just on share repurchases, you guys were aggressive in terms of starting to following early April sell-off and were able to pick off the stock at a really good price. Just think about maybe talk about your capacity to continue to buy back stock here with shares certainly trading at a discounted valuation. Yeah, I mean, I think from our perspective, we have ample capacity to both pursue further acquisitions if the opportunities were to present themselves or to buy back shares in scale or really to do both. Like I said, we do not think of it as an either/or proposition, but we have been really patient on the share buybacks. I think people have seen that over the last two and a half years and expect to continue to be patient. I would say we kind of started to dip our toe in the share buybacks that first week in April as we kind of thought we could be at the beginning of a longer-term downturn. I would say kind of if the market kind of went back to those levels or below that, we would be kind of watching it and ready in the right environment. I'd say it's also there's a lot that goes into the decision to purchase reshares. It's what does the balance sheet look like? What's our take on the longer-term macro and what's our broader opportunity set? It's not going to be a kind of perfect to pin down formula, but I think what you'll hear from us is we're going to continue to watch the market. We'll be patient. I think when we do see opportunities, you should expect us to hit them pretty aggressively. Awesome. Thanks, guys. Thank you. Thank you. The next question comes from Kevin MacCurdy with Pickering Energy Partners. Please go ahead. Hey, good morning, guys. Maybe to stick with the acquisition, can you share anything on how this deal came about? Was this a process or a negotiated deal? Maybe where these assets fit into the development queue? Yeah, sure. These are some assets we've had our eye on for a long time. I think we've been in some discussions with the sellers on a smaller scale going back several years. I'd say for us, this discussion's probably been going on again in earnest the last six to nine months. We had some conversations around potential trades, other ways to work together. Obviously, we're two large players in the Permian that have a lot of respect for what the other ones are doing. Ultimately, this did morph into something that I would call a process, and we were able to reach a deal that made sense for us, I think, largely on the back of our peer-leading cost structure. I think these assets were really interesting where a good chunk of the acreage was in existing Permian Resources units that were on the near-term drill schedule for us. I think we had a nice competitive advantage there. The newly acquired inventory competes for capital day one. I think we probably overallocate to some of these assets in the near term just given how low the break-evens are and how quick the payouts are. Appreciate that. I mean, it looks like to us that production is trending better than expected to start the year. Any observations on what is driving that better production compared to original expectations? Yeah, I tried to hit a little on my prepared remarks, but I'd say the majority of the Q1 outperformance is outperformance localized to two of the larger 2024 acquisitions we did. Just we've now had those kind of under our wing with our operating practices for kind of three months and nine months respectively. We've been able to swap out artificial lift and get our first kind of larger pads drilled on both of them. I think what we've been surprised by is the performance was better than expected, and some of the artificial lift swaps had a meaningful uplift in production. I think these are the kind of the a little bit of the good assets tend to outperform more often. We think that the deals we did in 2024 were on good assets, and we have now had enough time to get our hands around them. You saw the cost cutting immediately, and now you are seeing the production uplift three to six months later. Thank you. Great quarter. Thank you. Thank you. The next question comes from John Freeman with Raymond James. Please go ahead. Congrats on the acquisition. On the roughly one-third of this bolt-on deal that's not op, can you speak to the line of sight you've got on being able to work some trades to increase your interest in the operated units? Yeah, sure. I mean, I think with our existing footprint, we have meaningful overlap with every operator of scale in the Delaware Basin today, which is great. I'd say we really do have active ongoing trade discussions with, I think, everyone who's relevant and active in the Delaware Basin. As you take the roughly 4,500 non-op acres we've acquired here, that just fits right into the discussions that we're already having. Frankly, I think it should allow us to help optimize both the assets we're newly acquiring as well as some of the legacy PR assets that we've been working to kind of trade and consolidate. I think that's a great component of the deal. I think we also like some of the consolidation and buying opportunities around what may appear to be a non-op asset today may very well not be a non-op when we unleash our land team and our business development team, which I think are the best in the business on growing some of those positions. I think a lot of what we underwrote as non-op acres could very well end up being operated in not too much time. Got it. Can you all speak to kind of how y'all think about the trade-offs of depending on what the oil price does from here, but just how y'all think about the trade-offs of responding to a weaker oil price environment with reduced activity versus not wanting to slow down the efficiency gains and all the momentum that y'all built up if y'all were sort of oscillating activity kind of up and down with the macro? Yeah, I mean, I think at the very core, our development program and capital allocation through the drill bit is a very returns-focused equation. That has not changed in the new commodity price. I would say returns are obviously getting somewhat compressed given oil is down, however much you want to think, $15-$20 a barrel. The returns of our program are extremely resilient. If you go look at wellhead break-evens, they are in the low $30s, corporate break-even right around $40. I mean, we are still generating great returns through the drill bit. For us, I think what you see us doing this year is just given the overall macro backdrop, we have let the improvements in capital efficiency of the business accrue to less CapEx. That is why you see us, as opposed to letting it accrue to production and kind of blowing out the high side of our original production guide, I think where we are headed is we are going to hold the line on production and let it accrue to less CapEx for the year. Also, I think we can thread the needle of doing this in a way where we maintain kind of maximum flexibility with the ability to hit the gas pedal anytime between now and next year or early next year if we see things turn around. Similarly, we run our business with very few long-term contracts. If we see kind of things get worse from here, we are prepared and able to dial it back. It's not a perfect equation you can plug into, but it's kind of a start to the overall returns of the program and then kind of after that, trying to maintain flexibility to react to what's been a pretty volatile market. Thanks, guys. Well done. Thanks, John. Thank you. The next question comes from Scott Hanold with RBC. Please go ahead. Yeah, hi, thanks. If I can build on John's question there. Just as you see, obviously, you talked about you're going to be tapering some of your activity in the back half of the year with that reduction. Does that keep your volumes on a fairly stable rate into 2026? It is sort of a question on how you're positioned heading into 2026. Is the back half of the year still a pretty good maintenance mode into the next year? Yeah, I think relatively flat from where we were Q1 is fair. This is not a, we're not going to exit, the plan, as it stands today, is not to exit Q4 at some meaningful decline from what we printed in Q1, if that's the question you're asking. Yeah, I think as you think about 2026, I think our goal is to position ourselves to be able to, like we'll say, quickly react to what the environment looks like at that time. We've obviously never given 2026 guidance, but want to be in a position if the market is calling for it and returns are high enough, we could return to growth, which we've done really successfully the last few years. If it looks like something like today's environment, likely something more flat. If things had really gotten worse, would consider even further reductions of activity. I think our position heading into the year will be one of kind of perfect flexibility where we can quickly react to whatever the market looks like. Got it. Thank you for that. Just maybe your perspective on the broad M&A landscape. I mean, you all have done a very good job over the last several years of not only doing a lot of ground game activity, but mid to larger size transactions. In this environment, what is your real-time dealers telling you that's out there? What do you think the market looks like, say, in the next six months if things are status quo from where they are today? Yeah, I mean, I think kind of starting probably longer dated, I think we expect to continue to see opportunities like this size deal over the long term in the Delaware Basin. I think we've seen a ton of Permian consolidation in the last three years of a major scale. I think on the back of consolidation historically, you've seen non-core asset sales come out of it. I think this probably fits that bill, and you'll see more of it. I do not think we see anything like this coming down the pipeline in the next six months. I think the likely opportunities for PR in that shorter time period is really more of the ground game. I think we've had a really active ground game the last several years. I actually think in a downturn like this, there's the potential for that activity to actually pick up as you have potentially more motivated sellers. I also think a big part of the ground game for us is going to be we've got a lot bigger ground game footprint, as we've mentioned on the call today, like a lot more chips to play with, a lot more areas to go focus on. I don't think it probably shows up next quarter, but in the six to nine months time period in the back half of the year, I think we will really see a lot of opportunities on the ground game side to kind of grow the business organically, which is something we've done really well. I think some of the best return opportunities that we tend to see. Appreciate the color. Thank you. Thank you. The next question comes from Zach Parham with JPMorgan. Please go ahead. Thanks for taking my question. Given the activity drops we've seen across the industry already, and there's probably more to come, can you talk about what you're seeing on the service cost side at this point? Have those started to move lower yet? I'd say, yeah, they're just starting to kind of move lower, Zach. Exactly where it settles out, I think it's too early to say, but very much with the activity drop, I'd say service providers are aware. There are some that are taking a strategy if they'd like to kind of keep their market share and keep all their crews busy. With those, we're getting some price concessions. There are others who are more drawing a hard line if they'd rather drop activity themselves as opposed to give price concessions. Exactly how it shakes out, I think, is TBD, but there was a little bit left to give, it feels like, on that side, and we're starting to see it. Thanks, Will. Next, just wanted to ask on OPEX. You were in the lower half of the full year range in Q1. Can you talk about what drove OPEX lower and maybe give us some thoughts on how you expect OPEX to trend through the rest of the year? Yeah. We have, again, just integration of the deals we bought and kind of overall just good operating practices, I'd say, led to a good quarter. The biggest drive on the OPEX on a per BOE basis down is just going to be the outperformance on the oil side, just the fixed cost nature of some of those LOE costs. When you add more barrels, we just saw costs come down a little bit. Thanks, Will. Yep. Thank you. The next question comes from Gabe Daoud with TD Cowen. Please go ahead. Thanks. Hey, morning, everyone. Appreciate all the prepared remarks so far. Was hoping we could go back to the acquisition. Was curious if you could just refresh us on some of the targets up there near and around the Parkway asset and what you guys are doing from a spacing standpoint up there. Yeah, I mean, I think kind of the primary zones we've been the most active in the last couple of years are the second Bone Spring sand, the third Bone Spring sand, and the XY. That's kind of where the bulk of our activity has been and kind of will be for the foreseeable future. I think those are the best returning targets. I think I probably should have said this on one of the earlier questions. I think one of the other things that's underappreciated is there really is a lot more beyond just those zones as you move further north. It may be a little further down the stack for us, but really good targets like the first Bone Spring sand, the Harkey, which is a little more regional, but we've drilled a handful of good Harkey wells, and then some of the deeper targets in the Wolfcamp. I think it's an area that has a lot to continue to give. We're excited about what that looks like, not just near-term, but long-term. Got it. Got it. Okay. Yeah. No, that's great to hear. A follow-up, also just sticking to that region, could you maybe discuss what the gas processing capacity looks like around there? I know one of your providers is bringing on additional capacity pretty soon, but just curious if you can maybe speak to that as well. Yeah. I'd say we've had no issues historically with gas processing capacity in the Delaware Basin. I think we've been really fortunate that we've partnered up with kind of some of the biggest and the best gas processors in both Lea and Eddy County. I think kudos to those guys. They've been growing alongside us, spending capital kind of prudently ahead of the drill bit that we've never had any gas processing or gas egress issues whatsoever and don't anticipate having any going forward. Okay. Great. Great to hear. Thanks, guys. Thank you. Thank you. The next question comes from Leo Mariani with Roth. Please go ahead. Hi, guys. Let me just kind of stick in with the gas marketing side of the business here. I know you guys had brought on some more folks to try to kind of maximize the value of the gas molecules. Just kind of curious where you are in that process. Have you seen any progress at this point? Obviously, a lot of players are talking about trying to participate with data center deals and things like that in the Permian. Just trying to get a sense of where you think PR could fit in. Yeah, we are. Thanks. That's a great question. I think kind of something I'd say more to come there. I'd say it's absolutely been a focus of ours the last six to nine months. I think we've said a lot of times on calls like this that getting better prices for all of our molecules is a key part of our go-forward strategy. That's both kind of in base and gas, but also crude and, frankly, NGLs downstream as well. We're doing a ton of work in the background. Don't have a ton to share with you guys in kind of specific updates this quarter. I think when we're having this same call in August, I think we do expect to have some meaningful updates that could kind of change our longer-term trajectory. Again, this stuff takes time. I think actually thoughtfully kind of downstream marketing and maximizing value of all your molecules is not something that kind of gets done as quickly as maybe we'd like, but I think we've got a really good long-term plan and should have more to share in the near term. Okay. Appreciate that. I guess just in terms of your comment about returns on the business being fairly similar in the $60 oil world to what they were 12 months ago in a $75 oil world, can you provide a little bit more detail and kind of what the key sort of quantifiable items are around that statement on the returns? Yeah. I mean, the biggest driver by far is going to be just the amount of cost we've cut out of the business. If you follow from our previous earnings decks, what CapEx has done on a cost per foot basis is, I mean, we have meaningfully reduced CapEx per foot over the last 18 months. I'd say that reduction almost by itself offsets the reduction in crude prices. Similar to just longer laterals, same well productivity on a per foot basis with significantly less cost. You kind of add all those together, and that'll bridge the gap. Kind of not the same degree of impact, but continue to make really meaningful kind of per unit improvements on controllable cash costs as well. This is the kind of business that every penny adds up, and we think our team's really optimizing across the entire value chain. Okay. So I mean, outside of cost, there hasn't been any kind of shift or anything to target certain zones or kind of wider spacing or anything like that. It's really just a cost issue, is what I was getting at. No. Yeah. We said it a lot. You're probably thinking it, but we're kind of doing the same thing this year we did last year as we did the year before. We're going to be doing the same thing next year and the year after that. It's kind of steady as she goes. Thank you. Thank you. The next question comes from John Annis with Texas Capital. Please go ahead. Hey, good morning, guys, and congrats on the strong quarter. For my first one, focusing in on the New Mexico bolt-on, I was wondering if you could help frame how the DNC design and well spacing from the legacy operator compares to that of your existing assets in the northern Delaware. Are there any specific items that you would highlight that could drive cost savings or productivity improvements? Yeah. I mean, I actually think the legacy operator did pretty similar from a development spacing, especially in the Parkway area, to what we're going to do. It's been pretty well delineated across zones for several years. I think if you look at the results, the well productivity from the legacy operator on these assets was actually really strong. I think we're not explicitly familiar with their cost structure. I think any changes is probably going to be to just apply the kind of peer-leading Permian Resources DNC cost structure to what was a similar spacing and kind of development program. Got it. For my follow-up, you've certainly had success adding inventory through M&A and your ground game. My question is, how do you see the opportunity for organic inventory expansion through additions in secondary zones like the second Bone Spring Shale or Wolfcamp D driving inventory expansion from here? Yeah. I mean, I think that's something I think if there's one thing that surprised everybody to the upside with the Delaware Basin year in, year out, is that we continue to add inventory at a pace that, frankly, has astounded me. It seems like we find a new zone that's not a secondary or tertiary zone that's like a true core, computer capital zone every year. I think for us, what's maybe a little bit different than that is we're kind of accruing those zones. What I would say is more to the back end of our inventory. We've got such a high rate of return program today that, yeah, we're adding sticks to inventory and zones like you referenced today, but we're not really making them a meaningful part of our program because what we have in our base case is so good. Yeah, I think we're really excited about kind of the deeper Wolfcamp stuff, the C, the D, in both New Mexico and Texas, and some of the shales, the second Bone Shale, the third Bone Shale in both Texas and New Mexico. I think a couple of those are still, I'd say, in the early innings of delineation, but I think excited about that pace continuing. I would have told you five years ago that it's going to be hard to keep adding zones at the pace we've added, but it really hasn't slowed down yet. I think we're hopeful that that organic inventory addition continues. Frankly, in the Delaware Basin, we haven't touched the really deep stuff at all. I think there's been a lot of trends in the Midland Basin going deeper and deeper, and we're probably not even in the first inning of that in Delaware. I think for us, PR is in a fortunate position. We're not developing a lot of those zones today because we've got our consistent plan we've been doing the last couple of years, and that's worked really well. I think over time, continuing to inexpensively or basically for free adding additional inventory is a great part of the value creation story for a company like PR. Great color. Thanks, guys. Thanks, John. Thank you. The next question comes from Geoff Jay with Daniel Energy Partners. Please go ahead. Quick question about sort of the acquisition's impact on your CapEx in the back half of the year. Just curious, I know it competes for capital, so I guess I'm curious if you sort of suspect you'll add some activity on that acreage or if you'll likely just shift some things around from existing acreage to work up there. Yeah. I mean, I think the kind of $20 million we outlined is kind of pre-baked stuff that was, I'd call it, in the pipeline from the legacy operator. I think for us, before we really can kind of put our mark on the assets, it's probably going to be 2026 before you see that. Yeah, I do think this asset's good enough. You may see, like I said, a little overweight activity to this asset and a tiny, modest pullback somewhere else. I think it kind of depends on how the full year 2026 shakes out. I do think this is the kind of asset that should be neutral to overweight as we think about capital allocation next year, just given how it's really how high the NRIs are and how low the breakevens are. Gotcha. I was curious too, just given how contiguous the bolt-on is to your existing acreage, I mean, do you foresee eventually kind of migrating to the longer laterals up there or no? We've drilled some three milers up there, which we may at time to time drill, but that area is pretty shallow. I think anything longer than three miles in that area is off the table, just given the TBD is such that you don't have the same amount of weight down there on the bit to go out longer than three. It is a two to three-mile area. There are some areas where maybe we were at a mile and a half, and this section here allows us to go to two and a half or two, which is a lot of the synergies as part of the deal. I wouldn't expect that we're going to go to kind of anything crazy from a lateral length perspective up there. Excellent. Thank you. Thanks, Jeff. Thank you. Once again, should you have a question, please press the star followed by the number one on your touchstone phone, and you will hear a prompt that your hand has been raised. Your next question comes from Paul Diamond with Citi. Please go ahead. Thank you. Thank you. Good Thank you. Good morning, everybody. Thanks for taking the call. Just a quick one, I want to talk about kind of the progression of your cost per lateral foot. Made some really good progress, 3% in the last quarter. How should we think about that going forward? Is that more linear? Should we be expecting that to kind of flatten out? Just kind of how do you view that? I mean, had you asked me two months ago, I would have said it would have been flattening out, and then I'd expect kind of step changes in time with just kind of operational breakthroughs, which is kind of how we've seen the efficiency side of the equation go, where you find big wins and then you kind of flatten out for a few quarters and find big wins. I'd say the one change that is just the body has changed so much and activity drops are happening so quickly that I do think we'll get a modest amount of service cost reductions kind of from now to the end of the year. That obviously would help on the well cost side. Kind of adding those together, maybe there's an expectation of a slight reduction from the $750 a foot that shows up in kind of Q3, Q4 with hopefully an operational kind of win somewhere over the next six to nine months on top of it. Again, I'm kind of putting my crystal ball and speculating here a little bit, but we were hoping to get $750 a foot for the year. We achieved that in Q1, and I think there's more downward pressure from there just given where the overall macro sits. Got it. Got Got it. Makes sense. Just a quick follow-up. Now with this deal, you guys have added again to your non-op position. I just want to get an understanding of how you think about that longer term. Is that more designed to help the land guys in the ground game with acreage swaps? There could be some other type of monetization event in the future. For us, non-op's still a really small part of our portfolio. Our team's done such a good job of turning non-op into op that it's not something that is even a meaningful part of our go-forward CapEx programs, etc. I think for us, the goal is to have more pieces that we can feed our land team to go do trades and convert non-op into op in a way that makes sense. I think the Delaware Basin is a great place because I think there's a lot of win-wins out there, like this transaction on a broader scale, but on trades on the smaller scale. I think for us, the overarching goal is we want to operate because we think our cost structure and our execution process truly is differentiated. The way to maximize value for PR is going to be overwhelmingly to operate. I think that's the goal here. This is a great package of assets to kind of replenish the inventory of trade bait and things that we're constantly working. I think our team will be all over it post-close. Got it. Makes sense. Appreciate the time. I'll leave it there. Thanks, Paul. Thank you. The next question comes from Oliver Holm with DPH. Please go ahead. Good morning, James, Will, Guy, and team. Thanks for taking the questions. Just had a couple around the acquired assets. First off, just any sort of color you can provide on what the working interest on the operated locations look like compared to the existing portfolio. If you could maybe remind us how well costs up in that Parkway area compared to your average $750 per foot, just given the shallower depth. Yeah, sure. On the working interest, it's going to end up being at least at close, lower, the new operated location requirement or lower working interest than our average program, kind of call it 50-something percent working interest. I think for us, that's again part of the opportunity here, part of the opportunity to trade into that or to buy out the additional working interest in those operated units. Kind of call it 50-something percent today, but I think over time we're confident we can get that to 75% plus like the rest of our program. On cost, it depends a little bit kind of what zone you're talking and where you're comparing to, but call it $100 a foot cheaper than the broader program in Parkway, which obviously makes a big difference on returns and breakevens. Awesome. That's helpful color. Maybe for another follow-up, just looking at the acquired assets, is there a similar optimization aspect like we saw that drove the Q1 beat on some of the recent deals you did last year on the PDP side? I think from a straight production win, a lot of the previous operators' practices in the Parkway area are very similar to ours. I do not expect we will see a big uplift from switching out artificial lift. Based on the work we did in the underwriting, I do not think we have any plans to change it out. I think really the wins in this package is taking that 35% of the acres that are non-op and trading them into operated acres, whether that is operated within this package or operated elsewhere in the PR portfolio to kind of extract the maximum amount of value from every acre we bought. That win probably shows up in ways that are less easy to quantify on a quarter-to-quarter basis, but just kind of overall adds more high-quality, low-breakeven, top quartile inventory for the business. Awesome. Thanks for the time. Thank you. There are no further questions at this time. I would now like to turn the call over to James Walter, Co-CEO, for closing remarks. Please go ahead, sir. Thanks, everyone. As you can tell by today's call, we're really excited with our team's performance during the first four months of the year. Our operational momentum builds on the progress we made last year, and we are excited about the opportunities that recent volatility has presented to Permian Resources. We truly believe that it's during times like these that the strongest companies can differentiate themselves and create outsized value for shareholders that compounds over the long term. Thanks to everyone for joining the call today and following the Permian Resources story. Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.