Welcome to Pioneer Natural Resources' fourth quarter conference call. Joining us today will be Scott Sheffield, Chief Executive Officer, Rich Dealy, President and Chief Operating Officer, Joey Hall, Executive Vice President of Operations, and Neal Shah, Senior Vice President and Chief Financial Officer. Pioneer has prepared PowerPoint slides to supplement their comments today. These slides can be accessed over the internet at www.pxd.com. Again, the internet site to access the slides related to today's call is www.pxd.com. At the website, select Investors, then select Earnings and Webcasts. This call is being recorded. A replay of the call will be archived on the internet site through March 22nd, 2021. The company's comments today will include forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements and the business prospects of Pioneer are subject to a number of risks and uncertainties that may cause actual results in future periods to differ materially from the forward-looking statements. These risks and uncertainties are described in Pioneer's news release, on page two of the slide presentation, and in Pioneer's public filings made with the Securities and Exchange Commission. At this time, for opening remarks, I would like to turn the call over to Pioneer's Senior Vice President and Chief Financial Officer, Neal Shah. Please go ahead, sir. Thank you, Orlando. Good morning, everyone, and thank you for joining us. During today's conference call, we will be discussing our strong fourth quarter results, in addition to providing our 2021 outlook, detailing our strong financial position, and discussing the initiation of our variable dividend policy. We will also include an update on the synergies we're achieving through our Parsley transaction and our significant ESG momentum with new goals and targets set at the end of last year. After that, we will open up the call for your questions. With that, I'll turn it over to Scott. Thank you, Neal. Good morning. We're going to start off on slide number three. We had very strong free cash flow generation of approximately $300 million, driven by strong production, low CapEx due to continued efficiency improvements from the operational teams at all levels. We're announcing our formalized long-term variable dividend structure, which we have several slides. We'll be returning up to 75% of post-base dividend free cash flow to shareholders, and we'll give you some examples later on, significantly improving return of capital to shareholders. We'll generate significant free cash flow generation of approximately $2 billion expected in 2021 at $55 WTI. Currently, the strip is about $60 WTI, so we hope to beat that, driven by peer-leading corporate breakeven in the high 20s per barrel range. Synergies from Parsley acquisition are exceeding previous guidance, especially on a recent bond deal, interest savings, additional $25 million. We expect to achieve better savings on G&A as we go into the second and third quarters. We expect the synergies there of about $100 million. We also expect to realize our full operational synergy run rate of $150 million per year by year-end 2021. Rich will talk more, give more detail about that, and fully benefiting 2022 and thereafter. We remain focused on environmentally responsible operations with new emission reduction goals announced during our fourth quarter of 2020 with the release of our comprehensive sustainability report. Going to slide number four, our execution continues to remain strong. Both total production and oil production in the upper half of our guidance ranges for both fourth quarter and for full year. We generated $700 million in free cash flow despite averaging $39 WTI oil price during 2020. We're continuing to gain on lease operating expenses. They were down 15% from 2019 levels. Going to slide number five, our outlook. In 2020, obviously many E&Ps experienced year-on-year production declines. Pioneer continued its trajectory of strong performance, setting up a robust 2021, and especially going into 2022. As seen on slide five, we're expecting to generate approximately $2 billion in free cash flow at $55 WTI. Again, the strip is about $60. We hope to beat that. Our 2021 production outlook was impacted by the harsh winter weather encountered across the state of Texas last week that left millions without power for an extended period of time. Our 2021 production outlook reflects these impacts, which amounts to approximately 8,000 bbl of oil per day on a full year basis, a little above 2% of our total oil production. With our announced CapEx range of $2.4 billion-$2.7 billion, we're expecting to produce between 307,000 and 322,000 in 2021, which includes the impacts of the winter storm and also excludes 11 days of Parsley production from January 4th through January 11th, prior to the close. Our current production trajectory will drive strong exit-to-exit growth of approximately 8%, which sets up a very highly capital efficiency 2022 and beyond. Going into slide number six, the framework for the variable dividend, and discuss more detail over the next several slides. Top-tier inventory supports a low maintenance capital breakeven price of about $29 per barrel. As you look, our maintenance capital is about $2 billion now with both companies combined together. At $55 oil, the 2021 plan generates $2 billion of free cash flow. That's WTI. As I said already, the strip is about $60 for the rest of the year, allowing for substantial return to capital to our shareholders via a base and a variable, while concurrently further strengthening our balance sheet. Going to slide number seven. We've been talking about this for 18 months. We've been exploring it with shareholders, both long-term and short-term, for about 18 months. We're happy to announce the initiation of our variable dividend policy, which significantly enhances our long-term shareholder returns. Specifically, after the base dividend is paid, we expect up to 75% of the remaining annual free cash flow to be returned to shareholders in the form of variable dividend, which will be paid out quarterly the following year. To further strengthen Pioneer's balance sheet, which we think is critical and has been critical long-term for us, the 2022 variable payout will be up to 50% of the 2021 post-base dividend free cash flow. We believe that a strong capital return strategy, one that encompasses a stable and growing base dividend paired with a significant variable dividend, presents an attractive value proposition for our shareholders. I'm going to go into some mechanics for 2021 and 2022 to make sure it's clear. In 2021, let's assume we do generate the $2 billion of free cash flow. We have a base of about $500 million. We're left with $1.5 billion. We're going to split that 50/50 for 2021, payable in 2022. $750 million will be for the variable, and $750 million will go to debt reduction. The $750 million will be split equally into four equal payments, paid in each quarter. It'll be offset. It'll be a different part of the month of that quarter. We want each shareholder to receive eight checks a year from Pioneer. The estimated dividend yield based on current stock price is about 4.5% when you add the base plus the variable. Let's go to 2022. Right now, at the current strip, we expect to generate about $3 billion of free cash flow. Take away about $500 million for the base. You're left with $2.5 billion. We split that 75/25. That's $1.9 billion as a variable and $600 million for debt reduction. That equates, at the current stock price, to a 7.5% dividend yield. We hope that is clear as we move forward in 2021 and 2022 in those examples. Going to slide number eight, our long-term thesis. We've had this slide before. It remains the same. Remains focused on driving free cash flow generation and creating significant value for shareholders. At the current strip, our long-term reinvestment rate is 50%-60% of cash flow, which supports a program that delivers approximately 5% annual growth, adding one to two rigs per year long term. We expect this framework to generate approximately $16 billion in free cash flow during 2021 through 2026 at $52 WTI, which is greater than 50% of our current market capitalization. We believe this differentiated strategy positions Pioneer to be competitive across all sectors and a leader within our industry. Let me now turn it over to Rich. Thanks, Scott. Good morning. I'm going to start on slide nine. With the combination with Parsley, we are the only 100% focused Permian entity of size and scale. You can see from the map that on a combined basis, we have a footprint of about 920,000 net acres with a substantial inventory of high-returning wells. Importantly, zero exposure to federal land. Looking at the specifics for the 2021 plan, we plan to run on average 18 - 20 drilling rigs and five to seven frac fleets. As you can see from the bar chart there, we are continuing moving towards larger pads, which helps drive efficiencies and can be applied to the Parsley acreage position. Other than the larger pad sizes in 2021, our development plan in 2020 is very similar in both laterally and well mix compared to the 2020 program. As Scott mentioned, the winter storm last week did impact our quarter's production by approximately 30,000 bbl of oil per day. The vast majority of this production is back online, and we expect to see the remaining production back online in the next week or so. I would like to take this opportunity to thank all of our employees, and especially our field employees, supply chain team, and our service company partners for all their efforts to restore production and resume drilling and completion activities. They have done a terrific job while many of them have been dealing with their own personal home repairs from being without power and having broken pipes. I want to personally thank everyone for the hard work, and most importantly, for doing it safely. Turning to slide 10. You can see we are increasing our initial Parsley synergy target from $325 million annually, as Scott mentioned, to $350 million. In January, we completed the refinancing of the Parsley debt and saved on an annual basis, $100 million of interest, exceeding our target of $75 million by $25 million. In aggregate, post the refinancing, this lowered Pioneer's overall average coupon interest rate to approximately 2%. We expect to realize the G&A synergies of $100 million in the first half of the year, and we're well on our way towards that. On the operational synergy target of $150 million, we expect to achieve that by year-end 2021, which will drive a recurring benefit beginning in 2022. To give a little color on the work in progress, we're in the process of optimizing our field production operations, given the adjacent operations in the Midland Basin. We are consolidating our supply chain activities. We're looking at further capital efficiency improvements associated with tank batteries, water systems, and water disposal systems, just to name a few of the initiatives underway. As Scott will discuss as well, achieving these synergies is part of our 2021 compensation incentives. If you look at the right side of the page, you can see these synergies when are coupled with our unmatched inventory of high return wells, which supports our free cash flow model. Turning to slide 11, controllable costs. We are continuing our journey to reduce our controllable cash costs, and you can see here we've decreased them 23% in 2020 and expected to decrease them another 8% or so in 2021. These costs are comprised of cash interest, which I just mentioned being now at a low average cash cost of 2%. The second component is cash G&A, which we expect to be around approximately $1.20 per BOE in 2021. Thirdly, our industry-leading horizontal LOE costs. We won't stop here, and we expect this trend to continue to improve through time. With that, I'm going to stop here and turn it over to Neal. On slide 12, you can see Pioneer's premier asset-based position positions us to be the only E&P to have a corporate breakeven below $30 /bb l WTI within our peer group, enabling Pioneer to have a low reinvestment rate and drive significant free cash flow generation. This low breakeven price reflects the quality and the resilience of Pioneer's portfolio, underpinning our operational and financial strength. In addition, our unmatched high-quality asset base has no exposure to federal lands. Turning to page 13. To the right, you can see the graphic that demonstrates our best-in-class breakeven price with our low leverage that supports substantial return of capital to shareholders, as well as providing Pioneer both operational and financial flexibility. We witnessed the benefits of our strong balance sheet during the downturn in 2020, and it was Pioneer's strong financial position that facilitated the refinancing of Parsley's debt from an average coupon of greater than 5% to an average coupon of less than 1.5%, driving our interest saving synergies of $100 million that Rich discussed earlier. With our investment framework, our net debt to EBITDA will continue to trend lower while concurrently returning significant capital to shareholders through our base and variable dividends, creating value for shareholders while bolstering our fortress balance sheet. With that, I'll turn it over to Joey. Thanks, Neal. Good morning to everybody. I'm going to be starting on slide 14. We came off our best year ever in 2019. The drilling and completions teams committed to demonstrate similar gains in 2020. The graph on the left shows they delivered on their promise. The chart on the right-hand side illustrates the significant progress also made in reducing our facilities cost. Our construction and operation teams partnered together to decrease the initial cost of our facilities by 40% since 2018. All this has been accomplished without compromising our commitment to safety and protecting the environment. To the contrary, most importantly, we improved on all safety metrics in 2020. These gains would not have been possible without the hard work of our entire staff, supply chain team, and great collaboration with our suppliers and service companies. Add in the complexities introduced by the pandemic, this has been a truly remarkable year by any measure. Moving on to slide 15. I often get asked what's driving all these improvements. We're certainly very proud of the engineers and field staff that have worked hard to make these gains possible, but they did so in partnership with our technology solutions and data science teams. Their expertise has allowed us to effectively use our extensive data set to make better decisions and to leverage technology. This represents a very small subset of examples in different areas where we have used advanced analytics and technology to improve performance. Just a few examples as I move from left to right on the slide. By creating digital twins of our drill strings, we can use predictive analytics to push the performance envelope and reduce failures. Machine learning has allowed us to reduce costs by optimizing our proppant and fluid systems without compromising the deliverability of the stimulation or well performance. Mobility projects have allowed us to put more applications in the hands of our field staff to ensure they have convenient access to the information they need to perform their jobs and minimize driving time and improve uptime. To further progress our best-in-class emissions performance, we are deploying various sensor technologies that will allow us to detect emission events in real time and reduce cycle time for repairs. Ultimately, we are using our vast data set and the best available technologies to create more value while improving safety and environmental performance. Coming into 2021, our teams remain committed to keeping our people safe, reducing our environmental footprint, and demonstrating top performance when compared to our peers. Congratulations to the entire Pioneer team for their contributions to our safe and efficient execution in 2020. I'll now turn it back over to Scott. Thank you, Joey. Starting on slide 16, developing low emission barrels. I think being in the Permian Basin and the actions that we have taken as a company, we are at one of the lowest CO2 emissions per BOE produced worldwide. This is an interesting chart that we have found. It's essentially all state-owned oil companies, majors, large independents. It's the largest global operators in the world, making up over 64 MMbpd of hydrocarbon liquids. Pioneer's operations produce barrels with one of the lowest associated CO2 emission intensity globally. Our low-cost, low-emissions barrels continue to be desired around the world. Jumping to slide 17, we continue to make changes in our executive compensation going forward. One of the first things we've done, we did this last year, was tie myself, the CEO, for 100% on any LTIP based on performance. It's all based on performance. Pioneer has to perform for myself, the CEO, to be paid anything long term. We started that program last year. Right now, we're the only company that is doing this. Most CEOs average about 51% in the S&P 500. We added the S&P 500 index into our PSU peer group beginning in 2021. We've also added some new goals and increased some goals. We increased ESG and HSE from 10% to 20%. We have now ROCE and CROCE combined weighting of 20%. Last year, we did remove any production and reserve goals going forward. As Rich mentioned, we do have 20% in strategic. He mentioned that in that strategic, we do have to achieve our Parsley synergies to make that number work on any annual incentive in that regard. Going to slide number 18. Strong focus on ESG. Pioneer continues to hold all pillars of ESG of great importance. Our new sustainability report was released last quarter and reflects our significant strides in reducing both Scope 1 and Scope 2 greenhouse gas and methane emissions. It incorporates emissions intensity reduction goals on both. Inclusive of Parsley, we have a very low flaring intensity of 0.7% compared to the peers average of 1.4%. We continue to promote a diverse workforce which reflects the community in which we live and work. Finally, on the last slide, number 19, we're committed to driving value for our shareholders, and we're looking forward to finally commencing with our variable dividend structure. Again, thank you. We'll open it up now for Q&A. Thank you. If you would like to ask a question, please signal by pressing star one on your telephone keypad. If using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Once again, everyone, to ask a question, please press star one. We'll pause for just a quick moment to assemble the queue. We'll take our first question from John Freeman with Raymond James. Please go ahead. Good morning, guys. Hey, John. I appreciate all the extra detail, Scott, on the variable dividend policy. I just wanted to make sure, just to clarify a few things. When we think about long term, the strategy to distribute up to 75% of the prior year's free cash flow after the base, and then this first year, it'll be basically up to 50% of the 2021 free cash flow after the base. Maybe how to think about, in any given year, how y'all are deciding between if it's 50% or 75%. Obviously, your leverage and metrics are already really low, if there's anything that we should be thinking about how y'all have come to that conclusion. Yeah. I think, first of all, John, we use the word up to give us flexibility. Our goal all along is to pay 50% for this year and 75% of the free cash flow for 2022 and beyond. We do up to simply because of the volatility nature of our industry and of the commodity prices. Our true intention is to do 50% and 75% long term. That's our goal. At some point, I didn't make this point, but if you look at the numbers over six years, our debt to EBITDA targets are even yet better than 0.75. We actually, after a six-year time period, we get our debt essentially down to zero. At some point, the board will reopen whether or not we continue at 75%. We could go higher. At some point, if we have no debt and no balance sheet, and the reason we're doing that, as you have heard me talk, we're not a firm believer of buying back stock annually long term. We think when you have extreme downturns like we experienced last year, I wish we had the firepower to buy a lot of stock at $50. We'd like to have a great enough balance sheet to go into any future downturns to be able to buy back stock at one-third of the current price. You'll see our balance sheet get better and better over time. We just think it's better to have a great balance sheet due to the volatility of our industry. I hope that helps. That does. Thanks. Just the follow-up on how to think about the operational synergies, which I know a good bit of these y'all talked about would really occur in the second half of 2021. As we think about the different synergy levers, let's say, of whether it's sharing the tank batteries, water infrastructure, some of the contiguous acreage, maybe just some additional details on which of those you're able to realize pretty quickly versus those that may take later on into the year to fully realize. Yeah, John, I think the field optimization in terms of just the operational side on the production side are things that we'll capture quickly. The supply chain stuff are things that I think we'll capture quickly in terms of just leveraging our suppliers and maximizing our best contracts. I think those are the easier ones. I think as we've talked about the integration capital that we have in the budget, connecting the water systems, getting the disposal systems connected, and optimizing the tank batteries, those will take a bit longer. Those are probably more second half related into 2022. I think that's really the timing of those things, of what comes first and what comes later. Thanks. I appreciate it. Well done, guys. Thanks. Up next, we'll hear from Brian Singer with Goldman Sachs. Please go ahead. Thank you. Good morning. Hey, Brian. My first question is with regards to the reserve report. You had substantial upward revisions in natural gas and NGLs. You had downward revisions to oil. I realize there may be price adjustments driving some of this, and I wondered if you could comment on the drivers of the reserve report and the revisions beyond price, and what implications, if any, there are for Pioneer's production mix in the area and the ratio going forward of wet gas versus oil. Yeah. Brian, great question. I think as you mentioned, clearly oil prices were a driver, which I'll get onto the NGL and gas ones. As you know, oil prices, just using the SEC pricing, was down 30% from 2019 to 2020. From $56 WTI down to about $40 WTI. That's really driving the negative revisions on oil for the most part. When you look at the positive revisions that we're seeing on gas and NGL, it's really coming from a couple things. One is just our enhanced completions continue to improve our fracture networks, that's leading to better recoveries from the wells, not only on oil, but NGLs and gas as well. We've also seen improved infrastructure out there, better capacity, which has reduced line pressures to allow more gas to flow, and therefore added more NGL and gas reserves. If you strip those out, that F&D that was in the low fours, probably living closer to $7. I think that's the background of what the reserve changes were during the year. I think in terms of long term, you're thinking in terms of long term mix. I think we've been running in that, call it 57%, 58% range on oil, and we still anticipate that to be longer term at this lower growth rate to be the right level. Great. Thank you. Then my follow-up, at risk of, Scott, of asking a question that I think you've been asked a few times over the last couple of months. When you think about where production this year is going to exit, I think you said could be up, you might have said up to about 8% but something that's above the 5% threshold. The plan when you announced it, you had some materially lower oil price views than where we're at today, I just wonder how you're thinking about that flexibility into 2022 and the torque between growing at an above 5% rate versus potentially reducing activity to increase free cash flow and stick within the 5%. Brian, we're committed to the long-term growth rate starting in 2022 and beyond of about 5%. Some years we may be 6% or 7%, some years we'll be 3% or 4%. Unless we get into another extreme downturn, we have the flexibility to go back to zero growth like we did in 2020, or 2021 too. We're not going to let the growth rate jump up. If Joey and his team continue to achieve great capital efficiencies and it looks like we're going to grow 8% - 10% in 2022, we're going to dial back the capital going into 2022. Great. Thank you. Up next, we'll take a question from Jeanine Wai with Barclays. Please go ahead. Hi, good morning, everyone. Thanks for taking our questions. Hey, Jeanine. Hi, good morning. Just following up on the response to John's question. You mentioned getting to net zero, or sorry, net zero. Getting the net debt of being zero, and I think you said six years. At what point do you consider the company to be under-levered? Is it at zero net debt? Is it at 0.5, 0.25? How are you thinking about that level? I mean, at this point in time, seeing three downturns in 11 years, Jeanine, I just think it's better to have the best balance sheet in the business. It gives you so much flexibility. We have choices. Like I gave one choice. If we have zero debt, we can buy back stock in extreme downturns. If the board wants to continue a high variable dividend for a year or two, even though our free cash flow may not be as strong, they have that flexibility. It gives you so many more choices. I mean, we thought we had a great balance sheet for 2020, we were even afraid to buy back our stock at $50. We had no idea how long the downturn's going to occur. I've probably been through more downturns than any CEO out there. I just think it's better to have a great balance sheet, an even better balance sheet. We have the flexibility also, as I said, to take the 75% up higher, the board does, to 80% or 90% or 95% or 100%. You have so many more choices when you have even a better balance sheet than debt to EBITDA of 0.75. We don't have a stated target. I prefer to have, eventually at some point in time, zero debt would be my ideal target. Okay. Options are good. We like that. My follow-up is just on hedges. How does your new net debt projections, how does that factor into your hedge philosophy going forward? Could we see less hedging? Because I know we're kind of walking a fine line here in some respects, but generally, hedges are for risk protection, balance sheet protection, and generally we see companies with the better balance sheets having less hedges, so that reserves some more upside, because you have the balance sheet for protection. Just wondering if your hedge philosophy is evolving going forward as well. Thank you. It's still evolving. The big change, we used to spend 100% of our CapEx. Now we're only spending 50%-60% of our cash flow as CapEx. That's a big change. We may hedge. We may limit it to just to protect that going forward. We may hedge enough to protect the base dividend. Because the market is an extreme, the way Saudi and OPEC has engineered this latest rise, it's an extreme backwardation, and the volatility and the less liquidity in the market makes it tough to do any floors, to do any collars. When you used to be able to do a collar on each side of the strip, $5 on each side or $10. They give you very little upside anymore. As long as it's in extreme backwardation, we'll probably see us do less hedging. Lastly, the variable dividend is something that's going directly into the shareholder base. If we try to hedge that guess, it's a direct reflection on what happens to that variable dividend. I'm going to guess long term, we're probably going to do less. At the same time, we continue to see spikes out of the backwardation that's taken out of the market, and you may see us do a little bit more. We're going to remain opportunistic. Very helpful. Thank you. Our next question comes from Arun Jayaram with JPMorgan. Please go ahead. Yeah. Good morning. Scott, Rich. I was wondering if you could maybe help us better understand the shaping of the 2021 production and CapEx profile, just given some of the weather disruptions that you highlighted. We're estimating based on that 8% exit rate, is that around 335 bbl oil for 4Q? Just wondering if you could walk through the progression. Yeah. Arun, I think when we look at it, setting aside the first quarter because of the weather impact, we had said that it was going to be more towards the back end just because of the rig ramp that started late last year and just takes 180 days to do that. I think as you move into the second quarter through the fourth quarter, it is a ratable increase in production over that three-quarter time period. I think your exit rate is in the ballpark. It may be slightly higher than that, but it's in that ZIP code. On capital, I think we were pretty good about getting the activity to average rig and frac fleet rates starting in January. I would think your capital's pretty ratable throughout the year. I think really from a perspective of that, it's ratable on capital and ratable Q2 through Q4 on production. Great. Just my follow-up, one of the questions that's come in, as Pioneer obviously delivered on legacy in terms of the fourth quarter, but some of the Parsley volumes as you 8K'd a few weeks back were a little bit light of what the market was thinking. Have you done a bit of a postmortem there? Any conclusions there regarding the Parsley 4Q performance? A couple of things. One, they sold their Big Tex acreage that had about 1,400 bbl / day of oil production associated with it. That was one piece of it. I think the other piece of it was just reduced activity. They just didn't get the activity started back up on the frac fleet quick enough, they just had a limited number of POPs in the fourth quarter relative to what they had in the third quarter. It really was just production just didn't stay at that level, given the decline. Really that's our assessment of it, was just really driven by activity levels. The well performance has been fine. It's nothing that it just was activity. Got it. That's all baked into your updated forecast, right? That's correct, Arun. Okay. Thanks a lot, guys. Sure. Next question will come from Charles Meade with Johnson Rice. Please go ahead. Good morning, Scott, to you and the whole team there. Thanks, Charles. I apologize for belaboring this point a little bit. On, again, the shape of the 2021 production curve, it looks to me like you guys are going to have. Obviously, there's going to be a big bounce back, and it's not really a valid comparison to go 2Q versus 1Q because of all the weather downtime. It looks like in the back half of the year, you guys are going to be showing 3%-4% sequential quarterly growth. Is that close to what you guys are looking at internally? It seems a little high to me, but just because I think the exit to exit Scott talked about was 10%. It would seem to be slight, but in general, it's directionally in the right place. Got it. Thank you for that, Rich. My second question, this isn't really a new one for you guys, but it's highlighted again by the 5% CapEx allocation to the Delaware. Again, it's not new. That kind of seems like it either needs to grow or, as a percentage term, or you guys would be sellers. Can you offer us any kind of refresh to your thinking on how the Delaware is going to play in your asset portfolio longer term? Yeah. I think, Charles, as we've talked about before, the Delaware acreage is very attractive for a number of reasons. The higher oil cut that's there. We have a high NRI, and we've got good infrastructure over there. Really, the 5% for 2021 is really driven by the program that Parsley had outlined early in the year. We're really looking at that program. Given the run-up in oil prices, the economics are very favorable for the Delaware. We'll look at how do we, back half of the year or into 2022, reallocate capital from Midland over to the Delaware. We're still extremely pleased with that acreage and look forward to developing it as we get a chance to get our hands on it and move forward. Thank you for that detail. Perfect. Our next question will come from Scott Gruber with Citigroup. Please go ahead. Yes, good morning. First question here on LOE. Will the storm have any material impact on 1Q LOE? As production normalizes into 2Q and you have full contribution from Parsley, how should we think about LOE in 2Q, in the second half? Are there any extra production costs early on as you integrate Parsley that's not captured in the incremental CapEx? If so, how does it roll off? I think if you look at our LOE guidance for the first quarter, we did adjust that up about $0.25 a BOE just to take into account the repairs that we're seeing. They're minor in the grand scheme of things, but repairs on our wells and facilities due to the storm. We did factor that into our first quarter guidance range. If you take that range and back it down by $0.25 per BOE for the Q2 and beyond, that'll give you a good guidance range. Got you. Then any kind of incremental costs we should think about, kind of above and beyond the incremental CapEx that landed production here early on in the quarter? No, I don't think so, Scott. I think that we wouldn't anticipate any. Got you. Just a follow-up here on simul-frac. A few of your peers have gotten excited about the technique and the opportunity to drive another leg here of completion efficiency gains. Can you talk about your interest in the technique and potential deployment? Hey, good morning, Scott. This is Joey. We actually just finished our first simul-frac right before the winter storm hit. A great success there, and we have plans to do more as the year goes on and then feather them into our operations over time. Okay. Any color on kind of rates of efficiency improvement or savings on the D&C side in your first program? Yeah. Of course, we just completed it, so I don't have all the assessment on the cost side. From a time perspective, we did reduce the typical time that we would take to do a four-well pad by about a third, so significantly reduced the amount of time on location. We'll continue to evaluate that. We'll get a look at what the cost savings were, which of course will be material, and then we'll continue to evolve that into our operations. Got it. Appreciate the color. Thank you. Up next, we'll hear from Doug Leggate with Bank of America. Please go ahead. Thank you. Good morning, everybody. Scott, first of all, I think what you've laid out this morning is really pretty prescient. Congratulations on the framework. I'm sure Mr. Shah has got his fingerprints all over this. Congratulations, guys, on laying this out. My question was really a couple of things about the longer term. You've talked about 5%+ as a growth trajectory. I just want to make sure that that hasn't changed with the 75% of the free cash beyond the dividend, because it's probably a bit more than the market was expecting. I'm just wondering what that means for the 5% +. That's my first question. My second question is, I wonder if I could press you to think more about, you spoke about a five-year view from a capital and activity standpoint. I wonder if you can give some thinking as to what that would look like in terms of rigidity and spending, because obviously you've talked about 2025 too, but we think what the CapEx number is probably along with that. Two questions, one on the 5%+, and two on the longer-term trajectory. Thanks. Yeah, Doug. The second part I've talked about already, but I'll go over it again. The first part, when we say 5%+, we're just leaving the flexibility. We can't get 5% exactly. Some years we may be 6%, 7% some years we may be 3%, 4%. Our goal is to really average five on the production growth. If we go through down periods, I gave examples of low oil prices like we did last year, we're going to be flat growth. The goal is really not to exceed 5%. We do have to have the flexibility based on rig cadence and POPs cadence to have that flexibility some years to go to 6% or 7%. Some years we may be 3% or 4%. I stated, I think a couple of the analysts have already asked me about 2022. If it looks like we're going to be too capital efficient going into 2022, and we're going to hit 8%-10% production growth in 2022, we'll reduce capital to get it back closer to 5% or 6%. Right. Hopefully that answers your question. The target is really five long term. In regard to long term, I gave out some numbers going out the next six years, and I've seen some other projections by sell-side. Over a 10-year time period, we basically will throw off enough free cash flow that's equal to our current market cap, at current strip, that $52, $51 WTI or $55 Brent. Over a six-year time period, it's $16 billion. That $16 billion, we'll be paying out about 75% of that as a variable, and 25% actually goes toward debt reduction. That's why I made some comments about our debt's actually going to be going down over the next six years to almost zero after a six-year time period for the reasons I gave. I'd rather have a much better balance sheet that gives us more options in regard to whether we buy back stock during extreme down periods like we had last year at $50, or examples where we want to pay a higher variable than our free cash flow during a given year. Also, as I also gave the optimism that as our debt moves towards zero, that we could increase the 75% up to a higher amount, obviously, up to 90%, 95% or 100% of free cash flow. Hopefully, we're trying to give the board various options and flexibility, obviously, in this fluctuating commodity price market. Yeah. I apologize, Scott, if I missed some of the nuance, but just to be clear, I'm trying to get a rig trajectory or maybe a POP trajectory that goes along with that. Maybe that's too detailed. Yeah. I wasn't sure if. Okay. Yeah, I said in one of my earlier statements on one of my slides that our long term is that we're adding one to two rigs per year. Long term, you can figure adding one to two rigs per year long term from the current 18-20 rigs. Got it, Neal. Got it. Thank you. Okay. That's really helpful, guys. Maybe just a quick follow-up. Does your hedging philosophy change as with such a robust balance sheet and let's say upside risk to the oil price seems to be the growing consensus? How do you think about hedging now even though? Thanks. Yeah. We're only spending about 50%-60% of our cash flow now. We don't need to protect the CapEx as much as we needed to before. We do have a great balance sheet. The market's in extreme backwardation due to liquidity, less liquidity, the volatility of the market. We can't get any upside on collars or three-ways anymore. You'll probably see us do less hedging for that reason. If we see any type of spikes, we'll probably go into the marketplace. We're going to be opportunistic, obviously. The market is strong. I'm still a strong believer that demand's going to come back strong, both on airlines and also driving around the world once we get herd immunity. I'm confident that we can absorb the Iranian barrels into the marketplace over time, and that U.S. shale is no longer going to be a threat to OPEC and OPEC+. Appreciate your comments, Scott. Thanks again. Thanks. Our next question will come from Neal Dingmann with Truist Securities. Please go ahead. Morning, all. Scott or Neal, maybe I've missed this. Could you talk a bit around just Scott, you just were talking about even that 10-year, about what the potential could be on the variable? You've talked about, I know, been pretty specific about the production growth. Can you talk about the base dividend growth, will that just continue to flow with the other overall growth? I just want to make sure I'm clear with how you all are sort of assuming that base dividend growth with conjunction with the variable. Yeah, it'll be a small increase every year is our goal. It'll be minimal. It'll be something minimal, in that 1%-3% range is our expectations. Got it. Scott, you, Rich, or Joey, I'm just wondering on what you saw or experienced with the outages and now production downtime that you saw around the storm. Have you all started or will you think about or thoughts about permanent structural changes or anything around either, I don't know, just infrastructure, tank battery, you sort of name it? Are there things that you've started or would think about doing? I know obviously, here in Texas, it doesn't happen to us quite often. Just your thoughts about if there's things that you could do to, I don't know, better prevent that going forward? Yeah. I think we'll take lessons learned from it and see what things happen. In general, it was such a 50-year event or 100-year event, whatever you look at it, we still want to be capital efficient about it. We'll have to assess that. No decisions today, but we'll definitely look at it just from a lessons learned. I would say that, given the freak nature of it, that at this point, we don't see any substantial changes that we would make. Everything's back online now? Not 100%. We got the vast majority back online. Probably in the next week or so, we'll get the rest of it. Very good. Thank you. Sure. Next question will come from Derrick Whitfield with Stifel. Please go ahead. Thanks. Good morning, all. Perhaps for Scott or Joey. One of your peers recently committed to a plan to offset Scope 1 emissions through direct investments in CCS and/or renewable projects. From an ESG perspective, could you comment on the company's desire to pursue something similar to this as a means to offset direct carbon emissions from your operations? Yeah. In general, we're evaluating what companies like that and another company like OXIS doing on carbon capture long term. We're assessed. A couple of our also peers have stated they have ambitions, they use the word target and ambitions to go to net zero by 2050. We're assessing that also. We're assessing everything. Everything's on the table in regard to get better and better. Then we'll have to see what the Biden administration does with their upcoming climate. After the stimulus gets passed, they're going to focus on infrastructure and climate next. We'll have to evaluate that also. Everything's on the table in that regard. Makes sense, Scott. For my follow-up, perhaps for Joey, referencing slide nine, as you think about the progression of your D&C operations with regard to pad size and lateral length, can you comment on where you feel the efficiency limits are today and how this slide could look two to three years from now? Specifically on pad size and project size, I would say that I wouldn't expect that to continue to increase. Certainly, from a consistency perspective, as we do more co-developments and full stack developments, more so and more so, that we'll continue to have, on average, more wells per pad. From an efficiency gain perspective, as I said in my comments, I would've never expected for us to basically achieve in 2020 what we'd done in 2019. Continuing on my other comments that the benefits of technology are having significant improvements. The thing that I would say that's different now is that there aren't very many big wins to be had. simul-frac may be a big win, for the most part, when I look at the waterfall charts, it's lots of small incremental wins that add up to significant improvements. We're certainly not finished on that journey, and we'll continue to work at it relentlessly to continue to drive our cost structure lower and lower. Very helpful. Well done, guys. Thanks. Next, we'll hear from Bob Brackett with Bernstein Research. Please go ahead. Good morning. Quick question, maybe a little slower one. The quick question, what is the timing of the decision on the variable dividend payout? If we're sitting in 1Q of 2023, is that when the decision is made about the free cash flow payout from 1Q of 2022, for example? Yes. Bob, this is Scott. We generally have our board meetings in late January or early to mid-February. That's generally when we discuss increasing the dividend, and that's when we would make the final decision at that point in time. You're correct. Yep. That's clear. The second is, the trade-off between the variable dividend and share buyback. You clearly expressed eagerness to buy back shares sitting in the middle of last year, let's say. At some point, the shares are valued to the point where buybacks make less sense and the variable dividend makes more sense. Do you use an internal NAV to make that decision, or what sort of thought process would go into that? First of all, I've talked to over 100 shareholders over the last 18 months, and I would say 99.9% preferred that long term, they would prefer us to pay a variable dividend versus buying back any stock. That's long term and buying stock year after year. As you know, the industry has a terrible track record of buying back stock at the top of the market. People that are talking about buying stock now, we're back close to maybe a top of the market. That's the wrong time to be buying. Everybody's in favor of a great balance sheet, if you can afford it, to buy back in those dips. We had a chance to buy back at $50 last year. We didn't. We didn't have great enough balance sheets. That's generally our feelings long term. Buy it back only during those downturns, and not buy back shares, and then focus on the variable dividend as the best way to return capital long term. Great. Very clear. Thank you. Up next, we'll take a question from Paul Cheng with Scotiabank. Please go ahead. Thank you. Good morning. First, Scott and the team, just want to compliment you guys that for resist the temptation, just spend all the free cash and put some on the balance sheet, I think is the right thing for the E&P industry, for all companies when you have excess cash flow to put into the balance sheet, then at some point that gets you to net zero on the net debt. Anyway, two questions. First, with the lower growth rate that you guys are targeting now, you have a great inventory backlog. Does it make sense for you to look at some of the really long-dated inventory that it may take you 20 years from now before you get to trying to either monetize it through sell it or that through joint venture, have someone else to develop and you receive the royalty for some of the form? The second question is. Yeah, no. Yeah. Yeah. Go ahead. Go ahead, Scott. Sorry. Okay. I generally can't remember two questions. It's better to give me one question at a time. On the first question about long-dated inventory, it's the same policy we've had. We will continue to take our tier 2 acreage that we have and try to divest of it over time. I think with the oil price moving up, there could be more opportunities where people will approach us, and we've done that consistently over the last five years. Secondly, we've entered into a DrillCo arrangement, as we have stated back in 2019 when I came back, that we would look at doing things like that, and that got put into place. We've drilled nine wells already. That's very positive, and we're looking at extending that. Those are some of the examples that we're looking at, and we'll continue to do that. What's your second question? The second question is that Permian is clearly in excess take away capacity, and probably this situation will be here for maybe a number of years. How does that impact on your marketing effort and also how you deal with your existing take or pay contracts? Is there any way to maybe modify those? Paul. It's Rich. I'd say our contracts for firm transportation to move things to the Gulf Coast, we have those now. With the lower growth rate, we have some extra capacity, but with the Parsley transaction, a number of those roll off, their marketing arrangements roll off contract. In a couple of years, we'll be able to move those barrels onto that pipeline commitments. Plus that we have plenty of barrels that we can get in the Midland tank farm. There's no concern on our part in terms of being able to get the volumes and move those down and get to what we'd hope would be a higher price market with Brent prices and the refinery markets on the Gulf Coast. Clearly, where differentials are now is that we've been slightly negative in 2020 and so far in 2021. Long term, we still would think that prices on the Gulf Coast and export market will be better, but we'll have to continue to assess that. Given where the capacity is, I don't see us taking on any new commitments at this point. We'll continue to honor the ones that we have. Thank you. Sure. That concludes our Q&A session. I'll turn the call back over to Scott Sheffield for additional or closing remarks. Again, thanks, everybody. Hopefully, we'll get a chance, starting in late summer, early fall, where we can actually have some visits among all of us as we reach herd immunity here in the U.S. Again, look forward to next quarter. Again, thank you very much for tuning in to us. Thank you. This concludes today's call. We thank you for your participation. You may now disconnect.