All right, we're here for our 8:00 keynote. It's a great honor to have Scott Sheffield from Pioneer. Scott, thank you so much for being here down in Miami. Thank you, Neil. It's good to be back. I guess it's been since 2019. Yes. It was pre-COVID. It's great to have you here and to share your perspective on the outlook for the shale, but particularly the focus on the Permian. Scott, I know you're going to walk us through a couple of slides here, and we can then jump into Q&A. We're going to turn the floor over to you, sir. Yeah, thank you. Good morning. Obviously, two of my favorite speakers before. It's hard to follow Jeff. I think he's been really the one of the best predictors of oil prices since COVID hit up until recently. Who would have predicted SPR? Who would have predicted a zero-COVID policy? Who would have predicted a recession? If it wasn't for that, I'm a firm believer in what he's saying is going to happen, and I'll add some fuel to the fire of what's going to happen. Let me advance the slides. This first slide, y'all have seen something similar. I picked a few slides over the Christmas and New Year break that I thought are interesting. This is reserve replacement, which nobody looks at anymore. We never get asked the question, Neil, about reserve replacement anymore, but it's very, very important to what happens to this industry. This goes all the way back to 1933. You can see it's divided up between the majors and the independents. You can see what happens, what's happening now. It happened back in the early '80s with the collapse of oil prices, and it's happening now. The majors are way below 100%. The independents are now down to about 100% reserve replacement. That's setting up for a lot of things to happen over the next seven years in regard to whether it's higher oil prices or whether it's to a lot greater extent to great M&A activity over the next seven years. Next slide. Again, you've heard this number. We don't have it on here, you add it all up. We're spending over $1 trillion less than what I call the previous cycle. That's 2010-2014. Since 2015, about the industry worldwide is spending over $1 trillion less in investment. This slide I found, going back to 1986. This is essentially oil demand on a linear trend. You can see the effect of what happened with COVID. All it takes, as Jeff was saying earlier, is for China to get back, which is gonna happen sometime by the end of 2023. We're going back on that relationship. I think it's already been stated there's only a couple of countries left in the world that have the extra supply. You can see past recessions hadn't really affected oil demand. It always comes back to this relationship. This is an interesting slide from RBC put out over the last two weeks. Since I've been around a long time, even back before this, and looking at oil prices and oil price predictors, this is the oil price, WTI, and those lines that are going forward is the forward strip as of January 1st of that year. You can see, obviously, we all know that the futures curve, we all try to run our business off of it. We all test at lower cases. We run higher cases. You can see the prediction ability is terrible. What's amazing now is that we're probably in a more extreme backwardation than I've ever seen. Brent today is, say, is $80. It averages $75, $73-$75 over the next five years. It gets down to $67 in about five to six years. WTI is obviously in that $3-$5 range less in that. We can't really use the strip. In regards to a lot of people I've talked to, I'm a firm believer the strip is going to stay in backwardation. What Saudi wants is a higher price, whether it's 90 or 100 or higher. They want the strip to stay in backwardation. There's no liquidity in the markets. Banks aren't hedging. There's nobody that's using the product that's hedging anymore. No airlines are hedging. There's nothing to bring the strip up, in my opinion. I'm a firm believer if oil goes to $150, the strip is gonna be backwardated to $100 or $90, definitely over the next several years. You just can't use the strip in regard to what the future price of oil is. Now, this is the futures curve as of mid-December, and this is y'all's prediction. Neil, I don't know if it's yours or Jeff's or what, but I'm definitely a firm believer. I think we're setting ourselves up, as Jeff has told me over the last two or three years, for another... If you go back to this curve, you can see there's certain events in the world over the last 30 years that resets the oil price. I'm definitely thinking we're resetting into a base of about $90, with upside up to about $150 between now and 2030 is my firm belief. This is Goldman Sachs versus the Brent futures curve. Who's gonna be right? I think Goldman Sachs's gonna be closer than the futures curve. You can't use SPR that much more. We're already at a 40-year low on SPR for political reasons. The recession historically has not affected oil demand that much. Then we all know China's gonna come back and come back strong. Couple quick slides on Pioneer, and then I'll stop. Obviously, Pioneer has one of the largest, probably the largest contiguous acreage position in the Permian Basin. We definitely are focused on high returns. We've upgraded returns and simply said, Rich and myself and a couple other executives got more involved in picking every location over the next several years. With our staff, our top job is capital allocation, improving capital efficiency, and we have over 25,000 locations. Some of the exciting things you will see over the next few years, there are deeper plays that are being discovered, if you haven't followed. Watch out for the Barnett Woodford over the next several years. It's been tested already. Looks very positive. Pioneer has several thousand locations there in that regard, and also enhanced oil recovery. We know it works, whether it's wet gas or whether it's CO2, the Permian's gonna be here for a long time. Lastly, in summary, Pioneer delivered $7.5 billion to its shareholders, $26 a share. 95% of our free cash flow returned to the investor. Let me stop there, Neil, and open it up for yourself. Yeah, that's a great way to set the stage for the conversation. Thank you for that, Scott. Let's start on the micro and talk about the key strategic priorities for the organization in 2023. I think you alluded to it in terms of being more selective in terms of which well locations that you pursue and prosecute over the course of the next couple of years. Talk about what shifts you're making within the organization. Yeah. Essentially, what we're doing is just picking the highest. We upped our hurdle rates and pick us the highest return locations. When you have 25,000 locations to pick for, you have an area that's 200 mi north to south, 100 mi east to west, that's simply what we're doing. Our goal is to produce the lowest emissions intensity barrel and provide it to the world. That's really our key focus and return most of our free cash flow back to the investor. Yeah. Well, we'll talk a little bit more about the Pioneer specific plan, but the key notes on the outlook for the Permian. What is your outlook for the Permian? We're hearing a lot about resource maturity in the basin. We've had an extraordinary 10-year period to get to this point. How do you think about the growth profile and the next phase of the Permian? Thanks, Neil. We have the Permian. About a year or two ago, I stated it was gonna go to about eight million barrels a day to 2030. The EIA has it at five and a half million barrels of oil per day. We have lowered that to about seven by 2030. The reason we've lowered it is that obviously, the effects of moving to what I call stack development in both the Delaware and also in the Midland Basin, and that's combining the, either the Bone Springs or the Spraberry, depending on which basin you're in, the shallower formation with the Wolfcamp zones. It's better to drill four wells or six wells, all at the same time to get the best performance. There is a lot of companies that are moving. They're running out of inventory. They are moving to tier two and tier three inventory. I'll make a point. Chevron made a point recently that they were going to 1.2 million-1.5 million barrels of oil equivalent per day by 2040. That's the first time somebody put out a number that far. There's only three companies in my prediction that'll be over 2030 in the Permian Basin, over a million barrels of oil equivalent per day. That's Chevron, Conoco, and Pioneer. They're the only three that have an inventory that deep can take it over a million barrels of oil equivalent per day. What's gonna happen over time? The gas-oil ratios in the entire Permian Basin will continue to go up. We're seeing that. You'll see the percent oil drop for all those companies, most likely below 50% over the next 10 years. The gas itself will get up to about 30 BCF. We're gonna need a gas pipeline at least about every 18 months to two years going forward. The revision from, you said eight and a half million to seven million- Seven. Seven million barrels a day. By 2030. How much of that is a function of gas-oil ratios versus reinvestment rate versus a degradation in productivity? Does that make sense? Yeah. Yeah. I think one of the words I wanted to focus on is, as a reservoir engineer my entire life, degrading is probably the wrong term to use that the market's using. Yeah. When you combine the true degrading from a reservoir engineering standpoint is when you downspace a well and you're robbing barrels from the other well. That is what I call degrading. You're drilling your wells too close. Instead of 800 ft to 1,000 ft, you're drilling at 600 ft. You potentially could be, if you're not careful, you're gonna be robbing oil from the other, and it's gonna affect the decline curve of the original offset well. Right. That's true degrading. By combining Spraberry Bone Spring with Wolfcamp, and seeing lower productivity is not degrading in my view. It's a combination of some companies are truly degrading and some companies are just... It's the best way to develop the resource. It's a combination of both of those, Neil, is what's happening over the next several years and what's happening now. Do you see Pioneer staying as a pure play Permian story? Or do you see the need for diversification? No, right now we are a pure play. We've made two acquisitions that double the size of the company. Very good acquisitions at the right time in the cycle. There's nobody else there left in the Midland Basin. There's a couple other privates that have been rumored to sell. One is degrading their inventory significantly, but the other one's not for sale. Really we see no opportunities long term. Mm. In the Midland Basin, for Pioneer. Do you think the Permian will consolidate over time and these independents will end up in the hands of either the majors or merging with each other? I think we'll... Because of some of the slides I showed before in regard to people running out of inventory, reserve replacement, there has to be massive M&A activity. The biggest issue is that We had a series of companies in 2020 and 2021 that sold out toward the bottom of the market and sold at a small premium. Nobody wants to sell out at a small premium. Now, eventually, what will happen with a lot of these companies that don't sell out, the multiples will continue to decline as their inventory depletes. Mm. They have a choice. Do I merge with somebody with another inventory in high grade or do I just take a lower multiple over time? Mm. That's what I predict will happen. It'll be a combination. Some will choose the merger route and some will choose just to stay. I'm gonna use the vertical drilling program as an example since we drilled the most vertical wells of anybody in the Permian Basin. Mm-hmm. over the last 40 to 50 years. Yeah. You have to realize the vertical reservoir pressure decline is declining in the Delaware and the Midland Basin. As we drill more and more wells, reservoir pressure is declining. We took the vertical Spraberry, the conventional, from 160s to 80s to 40s to 20s. One of the long pluses of the Permian, once it hits that peak at eight, seven, call it seven, whether it's 7.5 or 6.5, it's gonna stay flat for about 30 years, in my opinion. Okay. People will continue to downspace. Oil price will be higher. They'll get more capital efficiency. Never expect the Permian to roll over, in my opinion. It will be flat for a long time once it peaks. Yeah, that's an out of consensus view, Scott, because there's a perception that the decline rates will start to catch up with the Permian, as you get to that plateau level. It's gonna be hard to sustain without a step up in capital spend. Maybe you could talk about it from an engineering standpoint. What needs to happen to maintain a plateau without capital efficiency going the wrong way? Yeah. As people flatten the production, the obvious thing is the decline rate will lower for everyone. Instead of growing 5% a year or 10 or 15 or 20, but instead of being in the mid-thirties, people will move down into the high twenties, in my opinion, maybe even the mid-twenties in the Permian over time. The more gas will actually help in regard to the capital efficiency. Mm-hmm. I'm definitely a strong believer in higher natural gas prices over time too, along with oil. The question is, how far does enhanced oil recovery and also these other zones, whether the Barnett Woodford takes out through both the Midland and the Delaware Basin, enhanced oil recovery. The question is, can we get enough supply of CO2? CO2 will work better than wet gas. Wet gas, we've already proven that wet gas works as a miscible agent. The question is, can we get enough CO2 with Oxy's project or bring in CO2 from the Gulf Coast long term? We're only getting 6% of the oil out of the ground. The more enhanced oil recovery works, it will also flatten that decline curve, and small companies aren't gonna be able to afford it. It'll be companies with contiguous acreage and large acreage positions. Let's talk more about 2023 in the Permian and some of the constraints that exist in the system and which of them are more transient versus structural. Maybe the first one is talk about the gas takeaway situation in the Permian. Henry Hub has come down, but Waha has been soft over the course of the last six months independently. Yeah. When do pipes come online and how is Pioneer positioned given that you have a better takeaway position than most? There's two big expansions coming on by the end of 2023. The next large pipeline coming on about the 3rd quarter of 2024. That's not gonna solve. This has to happen every 18 months to two years. You gotta think about more stuff. Expansion's gotta start in 2025, another pipeline in 2026, which haven't even been announced yet. I think the Waha problem is gonna continue off and on for the next decade. Mm-hmm. in my opinion. You're gonna see it do exactly what it's doing. 75% of our gas is either going to the Gulf Coast or California. Right now, a lot of our gas is going to California and collecting $40. If you watch the California market, and a lot of it's going to the Gulf Coast. Eventually, 25% of our gas will get down to about 5% once these expansions. It's really Parsley and DoublePoint that didn't have access to long-term capacity when we purchased them, and we'll be adding them to the expansions into the new pipeline. Pioneer, by the summer of 2024, will be down to 5% well. Yeah. NGL prices have come under pressure as well, Scott. How do you think that changes the economics of whether privates are willing to with the weakness in local gas and in NGLs and the softening of the crude curve, at least in this air pocket, are going to attack the 23 growth plans? If you look at most privates, the two biggest privates, Mewbourne Oil and Endeavor, have been, essentially a flat rig count since last summer. Right. One's at 15, one's at 19. If you look at the private percent of the Permian, it's actually coming down. Any increases... In fact, I did make the point earlier, Delaware Basin is up about 10% since last summer, mostly New Mexico, and the Midland Basin is flat. The privates are coming down in the Permian. One of the big reasons is that they don't have takeaway capacity. The pressure on flaring and venting has continued to increase and be there in the Permian. Besides inflation, we know inflation's up 10%-15% in 2022. Most companies are in that 10%-15% for 2023. Nobody wants to add a, build a new rig, because the new rigs are going to cost 30%-40% more, and you got to sign a three-year contract. Somebody told me Patterson made a comment that they're up to $38,000 a day. Yeah. I mean, that's unheard of. When oil is, the strip is, what I said earlier, for the next five years, it's $70. Yeah. Something's got to break in between. I just don't see the rig count really increasing at all in the Permian. If anything, it may decrease a little bit. The privates are definitely going to be held back because they don't have takeaway capacity. There's going to be an issue with midstream companies not having the capital. Look at the number of 200 million-a-day plants we have to build. I mean, Targa Resources is staying ahead of the game, but the rest of the other midstream processors are not. They're falling further and further behind. That's going to be an issue in regard to growth in the Permian also on the midstream. Talk about how Pioneer manages the cost inflation dynamic, around services companies. Service companies have under-earned for many years their returns on equity, and they're looking at the E&Ps earning solid returns on capital. Yeah. Understandably asking for their piece of the pie. No, I don't blame them, being in the industry for as long as I've had. I think the best formula is to tie it. I've been surprised how volatile WTI and Brent was in 2022. I mean, it's the tightest supply-demand I've seen in my 50 years. Then we have oil fluctuating from $75-$125, or $125 down to $75, where Brent went down to $75, WTI went down to $70. It doesn't make it really doesn't make sense. The service companies have to have that return. They got to return capital back to their shareholders. To me, I think the best mechanism that I've seen that we've done with all the providers, you got to tie it to an oil price. Mm-hmm. When oil prices are high and up, they get a higher price. When they're down, they get a lower price. Yeah. That's really the only mechanism that I see that will work with these service companies. Let's tie it all together. This is a great perspective on the Permian. If you think about exit to exit, U.S. this year is probably oil is gonna look like 700,000-800,000 barrels a day, it seems like based on the monthlies. Weeklies are a little noisier. Right. How do you think about exit to exit U.S. oil in 2023 versus 2022? Yeah, I look at that 700,000, and it's probably 150 that's Gulf of Mexico. Right. You got to look at that versus the hurricane. I looked at September and October EIA monthly. I focus on all the oil shale states. Mm-hmm. Basically, they're all flat except Texas and New Mexico. Texas is up. If you look at September to September, it's up 150. If you look at October, it's up 200. You got to share Texas with the Midland Basin, the Texas Delaware, and the Eagle Ford. The Eagle Ford did have some growth. Long term, those three plays are only, in my opinion, They're tapped out at 150,000-200,000, in my opinion, oil. That number is gonna come down over the next 12 months, in my opinion. Yeah. Based on all the things we've talked about. You look at the two counties in New Mexico, they're up 350. If you go into Enverus and S&P data, there's five companies that run 80% of the rigs in those two companies. If you look at their inventory on high return, I'm talking about high return inventory. It's only about three years. Within three years, that 350 growth is definitely gonna slow. It's gonna drop off significantly after a three-year time period. New Mexico is gonna slow from 350. When you put those numbers together, I look at oil. Ignoring the Gulf of Mexico, I look at oil shale. I've been saying 500,000-600,000. Yeah. For the last probably 12 to 18 months, where the EIA was at a million or higher. I'm saying now probably about 400,000. I'm ignoring the Gulf of Mexico. I don't follow as closely as I used to. Yeah. I'm saying about 400,000 for non-Gulf of Mexico, in Lower 48, 400,000, and that will continue to decline over the next five years. Okay. That's exit 2023 versus- Yes. 2022 black oil. Yeah. Okay. That's good color. Let's talk about the production plan. Then we want to spend some time on talking about return of capital. Lastly, we'll spend some time on policy as well, which I know you spend a lot of time on as well. I think there's a lot of confusion around Pioneer and whether on the sell side or the buy side about is productivity going the wrong way? Was last year not as good of a year for execution as expected relative to peers? I think what you've talked to me about is a lot of it is just about timing. Yeah. It's not a reflection of anything in the asset base. I want to give you the forum to talk about, you know, how you're seeing that and respond to some of the bear cases that might be out there. Yeah. Obviously, the data pointed we should have the best type curve in the Midland Basin. That starts with point one. When we started looking at our data, and the data, in my opinion, too many delayed wells. Delayed wells, you should not drill a delayed well, whether it's in the Delaware or the Midland. You get a letter less productive well if you drill a well six months or two years after the fact on a delayed well. It was basically experimentation. When we saw our type curve getting to the middle of the pack for the year 2022, among all the players in the Midland Basin, we said we got to make a change. We increased our hurdle rate. As I said earlier, Rich and I got involved in every well, every location, all 500 wells inside and looked at them well by well. Generally, we are responsible for capital allocation, but a lot of times you got to trust your employees, but we got involved in every location. Our goal is to be at the top of the Midland Basin in regard to that curve. We can do it significantly for several years. You're gonna see an improvement back to 21 or better for the next several years, and we can do that for, you know, easily, 15,000 locations for a long time. That's basically what happened with us. Walk us into the room. How do you approach that process of looking at the 500 wells and which ones to select? It was simple by picking we raised our hurdle rate, which knocked out, obviously some locations. The locations, when I say knocked out, they get drilled eight, 10, 15, 20 years from now. It was as simple as that. We have to move our type curve back up, so it was as simple as that. When you have this massive position that we have, there were some wells we questioned some, why were you drilling in this area? Why were you drilling in this area? Some of them may be leases held by production, or some of it may have been to protect a lease. There's other ways to solve that problem, basically. Scott, you showed a great chart that showed average 2023-2027 type curves relative to the 2022 type curves. Yeah. The step up in capital efficiency that you anticipate and productivity that you anticipate. When do we see it in calendar 2023? Is that a mid-year kind of thing? Yeah. The first wells are drilled in 1st quarter. Okay. We report those 2nd quarter. Yeah. Basically. By May, you'll see the 1st quarter results. Okay, great. Let's talk a little bit about return of capital. As you said, you've put up $26 of dividends in 2022, at least $26 of dividends, which is a 12% dividend yield. How should we think about in the current commodity environment, what the dividend could look like in 2023? You had indicated you're going to be countercyclical on the buyback, but the stock has pulled back and you're still constructive on the commodity, as are we. Does it make you want to change the composition a little bit more buyback versus dividends? No. All the shareholders that when we went out to all of our shareholder base, 99% of them preferred dividends over buybacks. We will continue to go out and talk to people over the next year. You know, for instance, I've been upfront with people. I collected myself $16 million-$17 million. I got more compensation off dividends than I did my total compensation as CEO. Mm-hmm. People don't look at the fact when you get $26, what do you do with that $26? They make another investment. I noticed in stock returns, a lot of people report Pioneer stock return for the year. They don't include the dividends in their analysis, a lot of the analysts. When you talk about $26, it's a big number. We will continue with that policy, that's been positive unless our current shareholder base want us to change it. I always will go back to the shareholder base. We will now with the strip, I've asked myself, the strip stays in backwardation. It gets up to $150, backwardates to $100, and continues that for the next seven years. I probably would have wished I bought back more shares. Mm-hmm. That will always be a question we'll continue to ask ourselves, what's better long term? How do you think about when do you lean into share repurchases? You did a billion and a half dollars over the course of the last year. Is it when the stock gets dislocated? Yeah. So far, if you look at the majors, most of their stock purchases are dismal. They bought them at the top of the market. If you go back to each of the majors and look over the last 20 to 25 years, independents historically have never bought back their stock until the last 18 months. The majors' track record is terrible. Exxon's announced they're buying back $50 billion. They got so much cash flow that they have to buy back the stock. In my oil price scenario, it's going to look to be a great purchase most likely. If oil is $60, $70, that spending that $50 billion may not long term. Independents' track record, it'll be interesting to see what happens, you have to have a strong oil price. We will continue to buy opportunistically. I think our average price is $218, close to the current price. It's probably better track record than most companies in regard to where to buy back the stock, the independents, especially. Let's talk a little bit about the way you're thinking about policy and spend some time on the environmental side, which is an important part of the conversation we have with investors as well. What do you think the risks are out of Washington as we think about energy policy here in 2023? Do you feel like that there is a supportive enough environment that it doesn't affect the way that you approach your business? We should talk a little bit about OPEC as well. Yeah. I think, sad to say, we've seen what's happened with the current administration from the time they came into office, two years ago, to asking us to drill more. They don't understand the inventory, they don't understand inflation. There's been a big debate about whether or not companies should drill more, obviously. As I stated in the Financial Times interview recently, it'll bring the industry back to the bottom of the S&P 500. Can you imagine if we would have done what they said over a year and ramped up production and grew production a million barrels a day going into this recession, zero-COVID policy? Oil price today would be $50 a barrel. Our industry would be back to the bottom of the S&P 500. It's working. Arjun's comment about 5% of the S&P 500, I'm a firm believer we'll get up to 10%-15% for the reasons that we've all said. We can't go back there. This is the first U.S. president, to my knowledge, I haven't found a CEO yet he has talked with. He has not talked to any oil and gas CEOs. That's the first U.S. president that I know of that has not talked to anybody from our industry. He has other people that's talked, Department of Energy, others. Obviously, if the Republicans can find a speaker, there's a block over the next two years, and it's going to be interesting to see what happens in 2024. I think we're at a stalemate for our industry for the next two years. Nothing else will happen. I'll leave it there. If we do get a price spike over the course of the summer, as we work through zero-COVID policy and we get into the seasonally stronger period and refining capacity start to ramp up as well, do you see the risk that the administration does something again, whether it's release more SPR, whether it's implement an export ban? Yes. The only thing the president has the power to do himself is export ban on LNG, our products and oil. He can do that with a stroke of the pen. That's probably the biggest risk. Obviously, we have sent the administration have been done recently and previously to show what the impact that would have on the industry. If you want to import more crude oil from the Middle East, that's the best policy. And it's not going to lower the price of gasoline to the American consumer because it's based on Brent. But that's his most powerful tool. We've seen Australia and Europe go to a some type of windfall profits tax. The House being definitely Republican, I see no risk of that in regard to windfall profits tax. As you know, if our scenario, whether my scenario or Jeff's scenario, if oil gets to $150, people are going to look at ways. It's already impacting the North Sea in regard to windfall profits tax on the U.K. side. It's again, not the right message, but you'll see people speak more and more about it. If we get to that scenario where oil is $150, gasoline is again at $7, $8 in the state of California. California will probably do their own windfall profits tax. You may see some states do that, possibly. Those are some of the things that could happen. With the Ways and Means Committee controlled by Republicans, I see no changes. I don't see that happening in the next two years. Yeah. Bans on federal land, which matters less for you because you're Midland. Yes. Feel unlikely in this environment. I don't, I just don't see it. They need more production. Why hurt the state of New Mexico, which is pretty much a strong Democratic state? They've rearranged, and now they have 100% of Congress is Democratic from the state of New Mexico, which affects, obviously, the Delaware. People don't realize 1/3 of the revenues in the state of New Mexico comes from oil and gas. Scott, you spend a lot of time with OPEC as well. You've spoken at OPEC over the years. Talk about the dialogue that you're having with OPEC participants. As well. What do you think? It's a question we asked Jeff as well, how do you think about their calculus over the next couple of years? I agree. In my opinion, Saudi is not gonna let Brent stay around $75. $75 average or even $73 average for the next five years, it won't happen from the standpoint of ABS and MBS. Their break-even budget is over $80 a barrel. You've seen what MBS is doing with the country with NEOM and other things that are going on in the country. They need oil to be at $100 a barrel or higher, in my opinion. OPEC ministers are frustrated over the recent price fall. It's understood. I think it's gonna change. If it stays too low, it wouldn't surprise me if they have another cut. They gotta wait till February 5th to watch the product ban on Russia. They got to see what happens with the COVID policy being 100% reversed. Mm-hmm I n China, and then we'll see what happens in the next 90 days. Yeah. So you've laid out a very constructive oil view. You said you're also constructive on natural gas, and when it's 80 degrees across America- Yeah I t's hard to be bullish at this moment. If you look out a couple of years, there is an interesting bull case. Talk about how you're thinking about the potential supply air pocket that we might have for the next couple of years relative to the structural demand side of the equation. Yeah, obviously we're going from about 12, 13 BCF exports. We'll probably get up to 20, and it wouldn't surprise me if we get closer to 25. We'll be the largest exporter in the, in the world. The gas over the last few quarters, call it two to three years, is trading in that 17, 18 to one. If you look at my bull price on oil, there's no way gas is gonna stay at $4, $4. If you had a $100 oil divided by 17, I'm probably more of a long-term $6 gas person. Mm. Long term. There's plenty of gas there. The gas people have learned not to over-drill also, not to put too much gas and get it trapped again. I think they've learned their lesson as the oil people have too, trying to get returns back to their shareholders. So a combination. Eventually, I hope that there's a world price on gas. In long term, if you talk to a lot of the people, I think there'll eventually be a world price on natural gas. How do you get closer to JKM or TTF? Of course, again, that right now those prices have moderated, but they're still trading at 5x to 6 x relative to the U.S. Henry Hub price. How can you get your barrels to market into those international markets to get a better gas price realization? You have to end up signing on 15-year long-term contracts with the LNG players. A couple of the independents have done that. We've continued to look at. We eventually think it will equalize. Whatever the world price is, back off the liquefaction and the transportation cost. It's just like Brent WTI. I think eventually it'll equalize. Yeah. Why commit to a 15-year contract is our question. You are gonna have spikes like we've seen. You're always not gonna have Russia do what they did and see that spike go up as high as it did. It's hard to make that investment to play that market. Eventually, I'm a firm believer it'll equalize like Brent WTI has historically. Mm-hmm. Is that JKM and TTF will equalize with Henry Hub long term. Let's have some, we got, last seven or eight minutes here, some model-specific questions as we make the turn into 2023. Talk about capital budget, you know, where we were in 2022. What are some of the moving pieces that investors should keep in mind as they're modeling out 2023 spend? Yeah. Long term, we did not grow 5% in 2022. When you look at it, we grew 0%-1%. When you model what happened in our acquisitions in 2020, 2021, we grew in that 0%-1% range. We're really focused on long term of growing closer to 5%. I think in 2023, 2024, 2025, 2026, we will try to hit closer to 5% growth. You'll see that as a change. And then you'll see us beginning to continue to test enhanced oil recovery, and you'll see us, as we've been public about, drilling a series of deep wells in the Barnett Woodford, maybe test shallower zones and other zones over the next five years. We have another probably eight zones we haven't tested. Mm-hmm. Things are getting very positive. Basically, the big surprise to me, we thought the Barnett Woodford was gonna be condensate. Oxy has announced four great wells in just near Midland. We're surrounding them. The gravity was 43 degree gravity. That was the big surprise to me. You're gonna see other zones being tested like that, and so you'll see us do that in 2023 and on. Those are some of the upsides that I see. I think you'll see us try to move closer to that 5% production growth. Yeah. You asked about capital. Yeah. We're gonna add, continue to add about two rigs per year, being capital will be up about 10%. Yeah. How do you think about... It's, it's early to talk about 2024 and beyond, but when you talk about the 5%, you're talking oil growth specifically. Yes. Okay. Gas will be a little bit higher. Gas will be a little higher. Okay. Very good. You got to realize it's going to be harder if we all go to this service cost, if we all sign contracts with WTI and Brent fluctuating. Mm-hmm. We're all gonna have to figure out how to build that into our budget. Okay. That's one of the hardest things. We're gonna have to companies are gonna have to give wider ranges, in my opinion. If 50%-75%... Service companies don't want to do a fixed cost. We've tried that for 40 years. It's almost impossible to do a fixed cost for a two or three-year timeframe. We all go to this oil price fluctuation. We're all gonna have to build that into our budget range that we give. If oil is 70, our budget could easily come down $200 million. If oil is 100, our budget could go up $200 million. That's one of the big issues we're all gonna have to deal with. Yeah. If we get the right formula for the service companies. For the production, the 5% number is a longer-term CAGR. 2023, it sounds like it could be a little bit lower as you work through. That's right. As you work through this. You know, yeah, it'll be in the, you know, in that 2.5%-5% range. Okay. Got it. As it relates to service cost inflation, you have a unique relationship with ProPetro. How's that timing of pressure pumping contracts affect the potential inflation that you're seeing? You're seeing us diversify, among the various frac companies. You're seeing us move more toward and trying NGV fleets using a combination of CNG, LNG, using gas from our well heads to run it, and eventually electricity. Yeah. The grid has to change significantly in the Permian Basin. It will. It'll be slower. That's the eventually, most wells. By 2030, I would say most wells will be on e-fleets and using the grid. Yeah. Whether it's at Pioneer in the larger companies, for sure. How do you get credit for your inventory debt? It's something that, you know, we talk a lot about as it relates to the majors or even has companies that have a lot of inventory that can be prosecuted in 2035 or 2040. How do you pull forward that value? Does it make sense to monetize some packages? We've been asked that for years. As you know, there's a lack of capital. People don't pay much for that. The best way we found is using private equity money. Mm-hmm. They put up the capital, and after somewhere between 12% and 15% return, we back in for the rest of it. You'll see some of our programs start kicking in 2023, 2024, and 2025. The market's not there. There's nobody out there paying $10,000, $15,000, $20,000, $30,000 per acre. That's what it's really worth. There's no way to monetize inventory. To get credit, I think if you look at the longer inventory companies, I think we should trade a higher multiple. All companies with long inventory, we're only trading a half to one turn above companies with shorter multiples. Eventually, my opinion is, as I said, the companies with shorter multiples have to continue to make, to me, dilutive acquisitions that hurt their inventory. That's what's going on now. It will dilute their current inventory. Companies will have to do that, and eventually the market will recognize that, in my opinion, and there'll be a bigger spread. Either they will go down, our multiple will stay where it is, or if we do get up to 15% of the S&P 500, the multiples will expand for longer life inventory companies. Yeah. That's the pushback we get on our positive Pioneer view. Many look at your free cash flow yield or even the EBITDA and say that you trade at a premium multiple relative to peers, but it sounds like your counter is you've got more inventory depth. We got higher free cash flow margins returning 95% of our free cash flow back to the investor. Those are also things that beat our competition. Last question. Around balance sheet. Yeah. You effectively have no debt on the business or very low leverage levels. Do you have the optimal capital structure, or does it make sense if you go into an air pocket around commodity prices to be more aggressive around returning capital and taking a little bit more debt onto the business in order to fund it? Yeah, our debt-to-EBITDA is down to 0.3. Longer term, I personally would like to get down to zero. I think that's the better balance sheet in a fluctuating commodity price, long term. What you wanna do is be able to. When you look at what happened in 2020 when our stock got down to $50. Yeah. You want several billion of firepower to be able to go in there and buy the stock really cheap. There's not one oil and gas company, including the majors, that bought their stock in the bottom of the COVID market. That's when you really want the firepower to go in there and buy the shares. We know our business. We know it's gonna come back. That's the reason you want the balance sheet to zero debt. Yeah. A ton of sense. Scott, I hope you have a great conference. Thank you so much for being here. Thanks, Neil. Great questions. Great conversation. Thank you. At this point, we're gonna split into Americana 1, 3, this one, and Americana 4. They have two different panel sessions. Have a great conference. Thank you.