Welcome to Pioneer Natural Resources Q1 earnings conference call. Joining us today will be Scott Sheffield, Chief Executive Officer, Rich Dealy, President and Chief Operating Officer, and Neal H. Shah, Senior Vice President and Chief Financial Officer. Pioneer has prepared presentation slides to supplement comments made today. These slides are available on the internet at www.pxd.com. Again, the internet website to access slides presented in today's call is www.pxd.com. Navigate to the Investors tab found at the top of the webpage and then select Quarterly Results. Today's call is being recorded. A replay of the call will be archived on the www.pxd.com through May 27, 2023. 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 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 H. Shah. Please go ahead, sir. Thank you, Joelle. Good morning, everyone, and thank you for joining us for Pioneer's Q1 earnings call. Today, we will be discussing our excellent Q1 results, driven by our strong oil production and fortified capital return strategy. In addition, we will discuss the resilience of our Free Cash Flow generation at various oil prices, which is underpinned by our best-in-class margins and unmatched high return assets in the Midland Basin. We will then open up the call for your questions. With that, I will turn it over to Scott. Thank you, Neal. Good morning. As you all saw in the news, I announced yesterday that I will retire as CEO of Pioneer beginning January 2024. Our President and Chief Operating Officer, Rich Dealy, will assume the role of CEO at that time. Rich has been with Pioneer and our predecessor company for over 30 years, from a $500 million company to over a $50 billion company, and has served in various executive leadership roles and is uniquely positioned to lead Pioneer forward. I'm proud of the success that Pioneer has achieved in its 26-year history, as well as key accomplishments over the previous several years. With consistent focus on the Permian Basin, we have formed the largest contiguous acre position in the Midland Basin, supported by a successful integration of two acquisitions during 2021, and have full confidence in our modifications we made last year as we're seeing early indication of great results with our Q1 results. Our methodical approach and highly efficient development program has positioned Pioneer as the most active driller and largest oil producer in the state of Texas. I'm especially proud to have led the independent transition to a Free Cash Flow model that focuses on return of capital to shareholders and further strengthens our balance sheet. I've taken great pride in leading the efforts to reduce flaring intensities and methane and CO2 emissions in the Permian Basin and its contribution to more sustainable practices throughout our industry. Building on this foundation, we are one of the first U.S. Operators to join OGMP, the Oil and Gas Methane Partnership 2.0, demonstrating our ongoing commitment to sustainable operations. I'm excited for Rich's continued leadership of Pioneer as CEO in 2024. I will now discuss our Q1 results, going to slide number 4. During the Q1, Pioneer generated approximately $950 million in Free Cash Flow, contributing to a base plus variable dividend, $3.34 per share, and $500 million in share repurchases completed during the quarter. This strong return to capital was supported by efficient operations in all production near the top end of our Q1 guidance range. Fortifying our return to capital, we increased our quarterly Base Dividend by 14% and refreshed our repurchase program with a new $4 billion authorization. Going to slide number five. Q1 results, as we discussed on the previous slide, Pioneer delivered strong Q1 production with both oil and total production near the top end of Q1 guidance at 361,000 barrels of oil per day and 680 million barrels of oil equivalent per day. We continue to focus on efficient operations, maintain low horizontal lifting costs that support our top-tier margins and significant Free Cash Flow generation. Over to Rich. Thanks, Scott. Good morning, everybody. I'm gonna turn and start on slide six, where you can see the development of our high return assets. Our peer-leading margins is expected to generate approximately $27 billion of Free Cash Flow over the next five years at $80 WTI. As Scott mentioned, we are modifying how to return Free Cash Flow to improve our financial flexibility and balance sheet, while also maintaining significant return of capital to shareholders. The modified framework provides the flexibility to allocate capital returns after the Base Dividend between variable dividends and share repurchases based on what provides the best value for shareholders. Under the refined capital framework, 75% of our quarterly Free Cash Flow, starting with the 2Q, will return to shareholders through a combination of Base Dividend, variable dividends, and opportunistic share repurchases. A strong and growing Base Dividen d remains our highest return of capital priority. In total, 75% of our quarterly cash flow will be directed towards capital returns, while the remaining 25% will be used to increase financial flexibility and further strengthen our balance sheet. As you can see from the slide, we expect to return a significant amount of Free Cash Flow to investors over the next 5 years. Turning to slide 7. We are further strengthening the foundation of our capital return strategy by increasing our quarterly Base Dividend by 14% to $1.25 per share or $5 per share on an annualized basis. This increase is incorporated into this quarter's base plus Variable Dividend that will be paid in June and reflects the 6 consecutive years of Base Dividend increases. With this increase, our Base Dividend yield of greater than 2% surpasses the average S&P 500 dividend yield. Turning to slide 8. During the Q1, Pioneer repurchased $500 million of stock at an average price of $206 per share, demonstrating our willingness to step into the market during dislocations such as we saw in March. In total, Pioneer has repurchased $2.1 billion in equity since the beginning of 2022, reducing shares outstanding by approximately 4%, which has benefited long-term shareholder returns and per-share metrics. Further enhancing our strong shareholder returns, the board of directors has approved a new $4 billion share repurchase authorization, providing additional capacity to return capital through opportunistic share repurchases. This replaces the previous authorization, which had $1.9 billion remaining. Turning to slide 9. Pioneer's return of capital framework, which returns at least 75% of quarterly Free Cash Flow, remains amongst the strongest when compared to peers, as illustrated by the graph on the left. Our modified framework provides the flexibility to allocate capital returns after our strong Base Dividend between Variable Dividend and share repurchases based on what provides the best value for shareholders. This peer-leading return capital strategy is sustained by our disciplined reinvestment rate and our deep inventory of high rate of return wells. Turning to slide 10. The graphic on the right illustrates the compelling Free Cash Flow generation that our program is expected to produce over the next 5 years at various oil prices. The combination of our world-class assets, top-tier margins, and moderate oil growth generates cumulative Free Cash Flow of approximately $27 billion through 2027, assuming an $80 WTI oil price. As you can see, our return of capital framework is expected to return approximately 40% of our current market cap to shareholders during the same timeframe, also at $80. Even at $60 WTI, our program is expected to generate approximately $13 billion cumulative Free Cash Flow over the next 5 years, demonstrating the durability of our program even at lower oil prices. Our robust and durable Free Cash Flow generation, paired with our commitments to substantial capital returns, delivers compelling value to shareholders through cycles. Turning to slide 11. As you can see here that we are reiterating our 2023 outlook, with full year production and capital guidance remaining unchanged. The company plans to deliver 2023 full year oil production ranging from 357,000-372,000 barrels of oil per day, and total production ranging from 670,000-700,000 barrels of oil equivalent per day, resulting in moderate production growth consistent with our investment framework. Both our drilling completions and facilities capital budget of $4.45 billion-$4.75 billion, and our exploration, environmental, and other capital budget of $150 million-$200 million are unchanged. As we've discussed previously, key projects within the exploration, environmental, and other category include the exploration drilling of 4 wells targeting the Barnett and Woodford formations in the Midland Basin, as well as continued appraisal of our enhanced oil recovery project. Based on the midpoints of our capital and production ranges, at strip pricing, we expect to generate greater than $4 billion of Free Cash Flow in 2023 from approximately $9 billion of projected operating cash flow. Turning to slide 12. As you can see, it provides additional detail on our 2023 capital program. During 2023, we expect to operate between 24 and 26 drilling rigs and place between 500 and 530 wells on production. Our 2023 drilling and completion activity continues to be distributed across our large and contiguous Midland Basin acreage position, with approximately 3 drilling rigs operating in our joint venture area in the south. This unmatched acreage position provides the scalable operational advantages, such as drilling and completing our 15,000+ foot laterals, with greater than 100 of these wells expected to be placed on production throughout the year. We also benefit from the continued utilization of simulfrac operations as well as localized sand mines, which both reduce costs and provide incremental operational efficiencies. Additionally, our significant water infrastructure provides a diversified disposal and reuse network that spans across most of our acreage position. Turning to slide 13. As previously discussed, we are continuing to realize improved returns and strong productivity from drilling our 15,000-foot lateral wells. Developing these long laterals drives significant efficiency gains that reduce capital costs with drilling and completion savings of approximately 15% per lateral foot. The combination of these savings and strong pro-productivity drive increased returns with IRRs increasing by more than 20 percentage points when compared to a 10,000-foot lateral. To date, we have identified more than 1,000 locations for long lateral development, supported by our highly contiguous acreage position, and expect more than 100 of these wells to be placed on production in 2023. Turning to slide 14, looking at the chart on the left, you can see Pioneer's peer-leading completions efficiencies and multiyear track record of efficiency improvements. We are now operating three full-time simulfrac fleets, which continue to be a major contributor to our high efficiencies and cost savings. Additionally, during the Q2 of 2023, Pioneer will add its second localized sand mine for completions operations. The use of localized sand is providing average savings of approximately $200,000 per well, principally due to reduced trucking costs resulting from the mine's close proximity to our wells. Pioneer expects 100% of our completions fleets to be either electric or dual-fuel powered by the second half of 2023, both reducing emissions and capturing cost savings opportunities based on fuel prices. Turning to slide 15, you can see on the left Pioneer has the deepest inventory of high return Permian drilling locations when compared to peers. This third-party analysis presents Pioneer as a premier independent oil and gas Operator across North America with decades of high quality inventory in the core of the Midland Basin at breakeven oil price of less than $50 WTI. With that, I'll turn it over to Neil Mehta. Thank you, Rich. Now starting on slide 16. The combination of our low cash costs and strong realizations generated peer-leading cash margins for the full year of 2022. While our strong price realizations were driven by our oil-weighted production, our low operating costs are a function of our unmatched infrastructure and efficient operations. These best-in-class margins underpin our strong Free Cash Flow generation, leading to significant capital returns to shareholders, both of which we have highlighted this morning. Turning to the next slide. Pioneer continues to offer a compelling investment case for shareholders, considering the combination of strong corporate returns and an inexpensive valuation. As you can see, our projected ROCE continues to be one of the highest in the S&P 500 for the second consecutive year. We believe our strong corporate return profile, when paired with our discounted valuation, provides a highly attractive opportunity for investors. With that, I will turn things over to Rich. Thanks, Neil. I'm gonna start on slide 18, where you can see we continue our commitment to sustainable operations, highlighted by our partnership with NextEra Energy and joining OGMP 2.0 in 2022. Additional detail related to our sustainability efforts and their impacts on our business can be found in our 2022 sustainability report and climate risk report. You can find these reports on our website. Turning to slide 19, Pioneer's ongoing sustainability efforts continue to benefit our emissions intensities, which can be seen in the graph by Pioneer's relative position globally. Pioneer continues to provide low emission barrels to the market, producing some of the most sustainable barrels in the world behind only Norway on a CO2 intensity basis. When combined with our low breakeven oil price, Pioneer provides exceptionally resilient production that we expect will have a place in the global market for decades to come. Concluding on slide 20, you can see Pioneer's key characteristics, which support our commitment to creating value for our shareholders. With that, Joelle, we'll open up the call for questions. Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. Should you have a question, please press star followed by the one on your touch-tone phone. You will hear a three-tone prompt acknowledging your request, and your questions will be pulled in the order they are received. Should you wish to decline from the polling process, please press star followed by two. If you are using a speakerphone, please lift the handset before pressing any keys. One moment please for your first question. Your first question comes from John Freeman with Raymond James. Please go ahead. Good morning, guys. Hey, John. Good morning, John. First off, you know, congrats, Scott Sheffield, on a very well-earned re-pending retirement. Rich Dealy, congrats as well on the pending promotion. First thing is on the refinement to the shareholder return framework. I'm assuming there was a pretty aggressive sort of outreach with investors and the feedback from them sort of drove this decision. Maybe you could just kind of talk to that as well as maybe if there's going to be some sort of a, I guess a framework in place on when y'all determine whether it makes more sense to lean into buybacks versus dividends each quarter. Yeah, John, thanks for the question, and thanks for the congrats too. Much appreciated. Yeah, really we had, you know, we have canvassed our shareholders as we've talked about in previous earnings calls over the last couple of months and, you know. Really what kind of led to the change in the framework was, you know, one, it really allows us to improve our financial flexibility and strengthen our balance sheet, while continue to deliver peer-leading returns to F capital shareholders. And it also provides the flexibility to continue to allocate capital between Variable Dividend and opportunistic share repurchases. You know, that was a big feature of what we wanted to accomplish too. The third piece is really with the greater liquidity. It really supports our intention of reducing gross debt through time and provides the ability to repurchase incremental shares at times of major market dislocations like we saw in March. We think it's a good refinement to the plan. Really to your second question on, you know, what will be the distinguishment between variable versus buybacks. You know, it's really a conversation from those conversations, it was clear that in the last few months that, you know, our investors do like the Variable Dividend, and it remain an important part of our method through which we return capital. We wanted to also be able to continue to repurchase shares on an opportunistic basis when we see attractive value. As you can imagine, that's really based on many factors that we evaluate when identifying that opportunity. Generally includes looking at our internal NAV at multiple different prices. It takes a look at what's happening in the marketplace. You can imagine what's happening in the macro environment. It's really one of those things that we will assess, you know, taking all those factors into account to say what's opportunistic at that time. Hopefully that helps some. It does. Thanks, Rich. Just my last question, you know, you detailed the big efficiency gains y'all continue to make, you know, on slide 14. I'm just trying to get a sense if, you know, during the quarter, the 120 TILS that y'all had or pops during the quarter sort of implies kind of a steady cadence all year on pops to get to kind of the midpoint of that TIL range. I'm just curious if kind of that's ahead of schedule what y'all saw in the Q1. You added the third simulfrac fleet. You know, we should assume that, you know, those efficiency gains keep maybe pushing the TILS or pops toward the higher end of that range. Obviously, a first-class problem, but just trying to think about the cadence on the pops the rest of the year. You know, I think the cadence is pretty flat quarter-over-quarter throughout the year. I think you're exactly right. The 120 wells we put on production is you're gonna see, you know, something similar for each of the quarters going forward. Very much in accordance with plan and on schedule with the plan. Really just as we would've expected it. Thanks again, Rich. You bet. Your next question comes from Neil Mehta with Goldman Sachs. Please go ahead. Yeah. Congratulations, Scott Sheffield, and Rich Dealy, congratulations to you, too. Wish you well in the new role. The first question is just there's been a lot of talk around consolidation, both around buying stuff and potentially putting Pioneer up for sale. I don't wanna get down the path of rumor mongering, I think for the investors on the call, any color you can provide on how you guys think about value creation through M&A and any updates on your thinking around this. Neal, I'll start with the general answer then let Rich talk about his thoughts on M&A in the Permian Basin. Obviously, in regard to the past stories that have been out in the media, the Board will always do what is in the best interest for shareholders. I think that's obvious from our standpoint, from myself and our Board. I'll let Rich comment on what he thinks of M&A activity in the Permian Basin. Yeah. Thanks, Scott. Neal, I'd say, you know, as we've talked about, you know, our primary focus, you know, is executing our development program and delivering strong results. That's kind of priority number 1. Really on an ongoing basis, as you've seen us do in the past, you know, we will continue to add to our tier 1 acreage position, you know, through trades and through small acquisitions that provide the ability to increase our lateral lengths and provide, you know, higher depth of inventory. That's really the primary focus. You know, we'll continue to look at things that are contiguous around us just 'cause we think that, you know, is key to, you know, adding efficiencies longer term. That's really, you know, our focus is those type of bolt-on things that, you know, add incremental inventory and lateral length. The follow-up for me is just Rich, as you take over the helm, what are the two or three strategic priorities that you're really focused on here as you build Pioneer for the next leg of the future? Yeah. Thanks, Neal. You know, it's really consistent with what we've developed working over the last couple of years, and we've put the strategy in place, the plan in place. Our focus internally for the management team and really our 2,100 employees is execution. That's what we're focused on is, you know, developing our resources out there and returning, you know, significant cash flow to shareholders. That's really what we're focused on and will continue to be focused on. Thank you. Your next question comes from Charles Meade with Johnson Rice. Please go ahead. Yes. Good morning to Rich, Scott, and Neal. I wanna begin by Scott saying I will miss your willingness to share your unvarnished views on the oil markets. Thank you for- Thanks, Charles ... for doing that over the last several years. I appreciate it. Thanks. Yeah. Rich, going back to, I think the first question you had about your, this is the framework and metrics you guys use on evaluating the attractiveness of the buyback. I think I heard you say that you have an internal NAV that you look at various different prices. Is that the, you know, I recognize that there's not gonna be, you already said it's not formulaic, but is that the framework that we should think about you guys using, or are there other frameworks or metrics that come into play? No, I'd say that's the main one. I mean, we assess NAV at, you know, $60, $70, $80, $90, you know, price outlooks. You have to take that obviously with, you know, what do you think the macro outlook is? What do you think the long-term view of supply and demand looks like, and where do you see oil prices going over time? It's the combination of all those things that really is the assessment that goes into that. Got it. Thank you. Then, you know, when I was looking at your results last night, I noticed that It's been three quarters now that you guys have returned more than 100% of your Free Cash Flow to shareholders. Actually, if you go back to Q22, it was 95%. I'm curious, what is the, is that a streak that we should expect will continue or is there gonna be more some mean reversion back to that 75% number? What's your expectation on the path and what's gonna guide that? Yeah. Great question, Charles. I think it's really, as we talked about, it's that framework of the 75% is that we're, you know, we're committing to return to shareholders. The other 25%, we do think it's important to continue to improve the balance sheet over time. That's not to say we can't use that for, you know, opportunistic times like we saw in March, that we can, you know, use the balance sheet to buy back more stock. We think, you know, a long-term framework for the company, the 75-25 is a good split and allows us to reduce gross debt along the way. Got it. That's helpful insight. Thanks, Rich. You bet. Your next question comes from Scott Gruber with Citigroup. Please go ahead. Yes, good morning, and I'll echo the congrats all around. Thanks, Scott. I have a question on your outlook for capital efficiency improvement. You seem to be in a somewhat unique position in that over the next 12 months, your well productivity, you know, should be improving while your well cost should actually be deflating. How should we think about, you know, overall, how much capital efficiency improvement you could see? I'm thinking about if you stack the improvement in well productivity on a percentage basis this year on top of the potential improvement in well cost on a percentage basis that you could see over the next 6-12 months. How large could that sum be? Great question, Scott. You know, I think would reiterate, you know that we're very pleased with our Q1 performance and strong well performance and really the operational efficiency that we accomplished during the quarter. The initial changes that we've made to the program are starting to materialize into our production. Obviously, most of that is still second half weighted, as we talked about on prior calls. But excited about where we're seeing productivity go. On the capital efficiency side, you know, really hats off to our teams across the company that are working on improving efficiency. Adding the extra simulfrac fleet, doing more longer laterals, the localized sand mines, our water distribution, all those things that we've been working on for many years that is gonna help improve our capital efficiency. You know, thanks to the hard work of all those people, you know, we've made significant progress and expect to make more progress over the course of the year. You know, I think everybody's working hard to make that happen. Got it. Got it. Just focusing on the well cost side, because obviously a number of initiatives you just mentioned, we're also starting to see, you know, initial signs of some deflation at the leading edge of service costs here. I mean, do you think, you know, those two combined could be pushing kinda, you know, 10% deflation in well cost as we kind of enter 2024 and all the contracts reset? It won't be lack of trying on our part, I can tell you that. You know, on the inflation front, you know, we're still seeing while things have moderated, the pace of change is slowing, so that's a positive. You know, we're not seeing substantial decreases. In a couple items, we've seen some decline, so it's still early to tell where that's gonna head. You know, I'm hopeful that we'll see some deflation over the course of the year. It's still too early to make any changes at this point 'cause we're kinda level of where we would've anticipated. Signs are starting to look positive on the inflation side. Hopefully, you know, that bodes well, as we move into 2024, that we can see, you know, what both the work internally that we're doing from efficiency gains, you know, some, a little deflation will help well cost as we move to 2024. Got it. We'll stay tuned. Appreciate the color. Thank you. Thank you. Your next question comes from Neal Dingmann with Truist Securities. Please go ahead. Morning, guys. Just a couple to follow up on that. Scott, you and Rich were talking about the vertical integration. I'm just wondering, could you talk maybe a bit more about that? Are you know, going to try to contract more sand, kind of maybe just hit on vertical integration if there's other, sort of procedures you could do there? Sure. The main thing from, you know, we've got our program, you know, fairly well locked in in terms of all the needs that we have for 2023. We stagger our contracts like I've talked about in the past, just from a supply chain standpoint to make sure you're not renewing anything on an annual basis. You know, we've got, you know, adequate sand capacity. Obviously, the localized sand mines are, you know, helping with that. That's been. Plus, it's a cost saving. It's savings about, as I said, $200,000 per well. The simulfrac saves about $200,000 for a well as we've added that fleet. You know, all those things that the teams are working on. Plus, we're lowering our emissions by, you know, moving to more dual-fuel. Those things are helping as well, in terms of lowering our emissions and lowering costs. You know, the teams are really doing an excellent job of, you know, making sure that we have the supplies that we need and improving upon them with efficiency and then lowering costs as we can, best we can in an inflationary environment. Great answer. Then just my follow-up on the full stack development. Could you talk about just what the typical pad size is now? It seems like you're making really good progress on, you know, what you started late last year. Could we see some upside on that, potentially later this year? No, like I said, we're very encouraged with how the Q1 gone. You can see from Q2 guidance that, you know, we're continuing to see the benefit going forward. We're real pleased. You know, no change in our guidance as we've talked about one quarter and, you know, but everything is moving well on that front, so we're happy about that. Very good. Thank you all. On our average pad side, that part is basically around 5. If you look at that across our portfolio, it's about 5 wells per pad is the average. Okay. You'll stay on that. Are there some-- I guess I should ask, are there some real large pads ahead that we should think about that might cause a little bit of lumpiness, or you'll stick to pretty much on that 5 well average? You're right. There are some bigger pads here and there, but, you know, they're spread pretty evenly across the year, so you won't see too much lumpiness from that. Very good. Thank you. You're welcome. Your next question comes from Derrick Whitfield with Stifel. Please go ahead. Thanks. Good morning, all. Also ditto on my congrats to Scott and Rich. Thank you. Thanks. Referencing slide 9, you know, I wanted to ask a bigger picture question on the value of low carbon intensity production. In this environment, with an ever-increasing focus on decarbonization, do you sense, or could you envision a date where your production would receive a downstream premium for its carbon intensity profile apart from quality adjustments? It's a great question. We'll have to see how the market evolves on that front. What I can tell you is the things that we are focused on is continuing to lower that emissions. Also, you know, we're in the process of putting methane sensors, you know, across over 80% of our tank batteries that we should be done mid part of this year. You know, the things that we're doing with NextEra on the wind farm, we're working with our transmission providers to get substations out there where we can move more of our operations to high line power, both drilling completions and facilities as we move into 2024, 2025 time period. There's a lot of great work being done across the company that will really help lower those emissions either further going forward. Whether that gets a premium value is, you know, a question, but, you know, we believe internally it's just the right thing to do. That makes sense. With respect to your exploration budget, could you perhaps better detail the results from your EOR pilot last year and your testing plans for this year? Yeah, it's still early. I mean, last year we had, you know, one cycle test that was, you know, gave us some positive indications, but we need to do more of those cycles, and that's what we're doing this year, and we're just kicking that, you know, cycles off as we speak. It'll be, you know, later this year or early next year before we have the results on that. You know, so far things are encouraging, but we really need to do more cycles to understand what the full cycle economics will look like on that project. More to come. Maybe just one clarification. How extensive is the area in which you're testing, and what kind of spacing do you have with those patterns? It's a, you know, a historical area that we've done. It's not a big area. It's, you know, 3 wells, I think, in two different zones is where it's being tested. Still, you know, an early development of an area that we have, you know, 100% ownership. Terrific. Thanks. That's all for me. Thank you. Your next question comes from Scott Hanold with RBC Capital Markets. Please go ahead. Thanks. Good morning, and again, congrats to both of you all on your next endeavors. Maybe first to start on that topic, Scott, if you could give us a view of like, you know, why the succession plan kind of announced now. You know, do you feel, you know, confident in the trajectory of Pioneer? I know there's been a lot of volatility on the oil side as well as, you know, just a lot of, I guess, questions last year on operational performance, but of the wells. You know, can you give us a sense of why you think now is the right time to step back? Yeah, thanks. When I came back, I first started off with a three-year assignment to accomplish all of my goals, including succession. I started working on succession back in March of 2019 when first month I came back. Obviously COVID delayed things, then we got into with our two consolidation in the Midland Basin with our two large acquisitions. I told the board last year that I was really focused on this year. It started last year. Especially with outperforming significantly Q1, with our production and our modifications that we made last year, I have full confidence in the fact that we're gonna have significant uplifts over the next several years. It was just a good time. I've been doing this for over about 35 years, running, the public company and its predecessor. I'm almost 71, and so, you know, it's time to enjoy the rest of life. As simple as that, so nothing else involved. Fair enough, it's well deserved. You know, maybe kind of going back to the new shareholder return strategy. I know that you all emphasize that, you know, there's the other 25%, you know, it sounds like the first priority is balance sheet, obviously opportunistic buybacks. Just a little bit of commentary on, you know, the sort of reducing gross debt would be helpful. You know, if obviously, if we just go to your slides in terms of your five-year Free Cash Flow. I mean, if we pick a $70 oil price, I mean, that would more than get you to net debt zero, or actually a negative net debt number. You know, Do you think long term, you know, that's in the cards where you get down to zero net debt, or do you think there's an optimal level of leverage on the balance sheet? Hey, Scott, it's Neil. How are you? Good. You're thinking about, I think, the right way. I mean, it's our goal, and we've always said it. We believe in a pristine balance sheet and one that provides us durability during the down cycle, as well as provides us operational and financial flexibility during an upcycle. It's our intention to continue to pay down gross debt as it comes due. Now, if you think about gross debt versus net debt, you know, we're gonna continue to drive down gross debt, but we know we have some long data maturities that have a very low interest associated with them. I think it's the 20/30/31s. You know, those will more likely than not remain outstanding. As our gross debt comes due, it would be our intention to pay it down. Okay. Then just out of curiosity, if I could tack on a half to that. You all did, you know, issue debt here recently when you had the $750 note come and due. You know, why do that? Was that more of a temporary bridge till you get a bigger quantum of Free Cash Flow? No, I think that's, I think that's the right way to think about it. You know, our intention is to reduce absolute gross debt through time. As you know, however, given our 2022 year-end cash balance, and then you saw the recent downtick commodity prices during the Q1, we thought it was prudent to finance the maturity that's due here in May. That's exactly the reason. I view it more of a temporary bridge as we shore up free cash from the balance sheet, as Rich alluded to earlier. Thank you. Of course. Your next question comes from Bob Brackett with Bernstein Research. Please go ahead. Yeah, good morning. Please pass my congratulations on as well. In terms of self-sourcing sand, can you talk to the state-of-the-art in sand in terms of grain size, moisture, crush strength? What's sort of the leading edge of what industry is doing? Good question. I don't know I have all the specific details on each of that. You know, really, we've been using West Texas sand out there for really probably, you know, a bigger part of a, you know, maybe not a decade yet, but it's been a long time and it's worked, you know, great. Really, that's really what we're continuing to use. The localized sand mines are exactly the same as what we were getting, you know, further west. And it's worked out, you know, for the whole industry. I mean, is there? The capacity is pretty well spoken for today. That's why these localized sand mines are helping with providing incremental capacity. It's the best and cheapest source available. As you know, bringing, white sand or other, you know, resin-coated sand or other proppant type sand is just more expensive, and this is, you know, highly efficient and highly cost-effective to use in the field. Very, very clear. Quick follow-up. Going back to the pad size of around 5 wells, how do I think about the geometry between zone development, which sort of intuitively seems would be larger, pads versus that 5-well number that's kind of flat through the year? How do I think about that? Yeah, you know, each of across the basin is, you know, the full stack development looks differently, and you do them in a half section type development. There may be, you know. It'll look different by zone. It's typically, as you've seen on most of the diagrams that we had in charges, if you wanna kinda equate it to looking like a wine rack, that's how it's done. We just, you know, we'll go from one pad to the next pad. They may be, you know, we use this term like mow the lawn. It's just sequential, and so just think about that's how we're developing it across the field in these significant areas. 'Cause it really just helps from an efficiency standpoint to keep rigs in one area. Yep. Okay, that's clear. Thanks. Sure. Ladies and gentlemen, as a reminder, should you have a question, please press star followed by the one. Your next question comes from Doug Leggate with Bank of America. Please go ahead. Thank you, guys. I seem to not be able to get my queue, my queuing up done properly. Thanks very much for getting me on. Scott, your stock's up 50% since you came back. Congratulations. You did lead that change in mindset for the market and long-deserved retirement. Same to you, Rich. You've put up with my nuanced questions, it won't surprise you that I've got a couple of nuanced ones today. Congrats to you too. My first question is this: Guys, I wanna go back to Neal's question about M&A, I wanna be very specific about this. Your pattern has been not to comment on market speculation, you did with Range Resources. You broke the precedent. The language in that press release was very specific. It said, "We are not contemplating a significant business combination." Should we assume from that then that that would preclude any discussion with ExxonMobil? Doug, the primary reason we responded to and issued the press release on the Range, was due to the obviously significant reaction that we got back from our shareholder base. Obviously, there was nothing going on, we reacted. We saw our stock get down to about 180. That's the reason, only reason we went away from no comment. You're gonna see us always use that no comment like every other company does in every other industry. As I said before, the board will always do what's in the best interest for shareholders. You did not have discussions with a larger company, or you did? I've already answered the question, Doug. Yeah. No, I was referring to the not contemplating a significant business combination, but I understand. Thanks, Scott, for... I know it's a tough one to tricky one to navigate. My follow-up, though, is on the capital return framework. I really want to get to the issue of value because we all know that, you know, the commodity is a key input. Once again, you guys have talked about compelling valuation in a number of different, you know, contexts. You've also told us what your Free Cash Flow guidance is, $4 billion. With one of your best inventory depths in the industry, annuitize that it's under your current market capitalization. I want to understand how you define value. More importantly, if you really believe that, why wouldn't you forgot the Variable Dividend and just focus on buybacks? Hey, Doug, it's Neal. I'll take that one early, I'll start with off. I've known you for what? Close to 20 years. I think you were always one of my first calls when I was on the buy side. We've had great discussions. Oftentimes we've had different opinions and different thoughts, which again, is what was what makes a market. You know, I think we would describe value and look at value multiple different ways. I think it's more than just dividing the Free Cash Flow by the weighted average by your WACC. I think many on this call, the investors that look at our stock and assess the value and the stock assess the value of the overall market also look at it very differently and through multiple lenses, not just one singular lens. I'd say that's 1 of the ways that we perceive value is not just by 1, but by multiple lenses. The last slide is 1 of those views that we have. We look at ROCE. The commentary that we've gotten from our shareholders is look, focus on your return of capital employed, your corporate returns, and you can see that we're leading the sectors. You know, you look at that sector, the sectors, and you look at the valuation of the sectors within the S&P 500, and we see somewhat of a mismatch there. I think many would agree with that statement. You know, you can look at valuation, relative valuation, sector valuation. We also believe looking at the inventory, duration of inventory, the quality of inventory, that also comes to bring to bear, looking at the margins, all of that. I would say valuation, from our perspective, and I think many on this call, it's more than just one singular metric, but encompasses more of a greater mosaic. You know, in terms of your question now the variable versus the buyback, you've seen the edited, the modified capital return framework, and part of that now contemplates, as Rich alluded to, share repurchases as well. We see great value in our equity, and it is now a defined part of our capital return framework. It's a fair and balanced response, Neil, I do respect our relationship over the years. Thanks so much. Of course. Thanks, Doug. Appreciate it. There are no further questions at this time. Please proceed. Again, thank you all very much. look forward to seeing you in these last calls. Again, thank you. Again, congratulations to Rich. Thank you. Thanks, everybody. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.