Good morning, ladies and gentlemen, and thank you for standing by. Welcome to the Southwestern Energy's Q4 2020 earnings call. Management will open up the call for a question- and- answer session following prepared remarks. In the interest of time, please limit yourself to two questions and re-enter the queue for any additional questions. This call is being recorded. I will now turn the call over to Brittany Raiford, Southwestern Energy's Director of Investor Relations. You may begin. Thank you, Matthew. Good morning and welcome to Southwestern Energy's Q4 2020 earnings call. Joining me today are Bill Way, President and Chief Executive Officer, Clay Carrell, Chief Operating Officer, Michael Hancock, Interim Chief Financial Officer, and Jason Kurtz, Head of Marketing and Transportation. Before we get started, I'd like to point out that many of the comments we make during this call are forward-looking statements that involve risks and uncertainties affecting outcomes. Many of these are beyond our control and are discussed in more detail in the Risk Factors and the Forward-Looking Statements sections of our annual report and quarterly filings with the Securities and Exchange Commission. Although we believe the expectations expressed are based on reasonable assumptions, they are not guarantees of future performance, and actual results or developments may differ materially, and we are under no obligation to update them. We may also refer to some non-GAAP financial measures, which help facilitate comparisons across periods and with peers. For any non-GAAP measures we use, a reconciliation to the nearest corresponding GAAP measure can be found in our earnings release available on our website. I'll now turn over the call to Bill Way. Thank you, Brittany, and good morning, everyone. We appreciate you joining our call today, and I hope that you're all safe and healthy as well. I also hope that our listeners today in Texas have recovered from the historic weather events that gripped the state last week. Before we start, I want to sincerely thank all of you in the investment community for the outpouring of support over the loss of our dear friend and colleague, Julian Bott. We're so grateful for that outpouring, as is his family. Julian made a lasting impression on our lives and the company, and we will miss him greatly. We entered 2020 with a plan that we believed would further strengthen the company's current business in support of our strategy to deliver improving value for shareholders. No one could have predicted that 2020 would unfold how it did, but our strategy, business plan, and agility enabled the company to thrive during such a turbulent year. The resilience and commitment of the entire SWN team provided the resolve necessary to execute that plan and deliver results that would stand out in any year, regardless of the unprecedented low commodity prices and global pandemic. This was all accomplished while achieving record safety and environmental performance. We also effectively implemented our COVID-19 management plan with protocols that shielded our people from exposure at work and shielded the company from any material business or operating impact. We often speak about our strong performance culture and the value it derives for shareholders. 2020 was filled with proof points of our culture, delivering impressive results across our four strategic pillars, those being creating sustainable value, progressing best-in-class execution, increasing scale, and protecting the company's financial strength. Guided by this strategy, we have deliberately repositioned the company over the past few years, and we continue to deliver on that path in the Q4. I offer my sincerest thanks to all of the people of SWN, who continuously step up to do more with less and consistently step forward to assure delivery on all of our commitments that we make. Well done to the entire team. Let me share some of the team's many accomplishments. Our Q4 results included production at the high end of guidance, resulting in free cash flow of $55 million during the quarter. We continue to highlight the strength of our dynamic hedging program, recording a gain of $362 million for the year and $52 million during the quarter, including natural gas basis hedges that protected the company from the widening differentials in Appalachia being seen by many in the basin. We also reported improved NGL realizations, a trend we expect to continue in 2021. On the operational front, Clay will detail later the many milestones that we achieved last year, including further evidence of our relentless cost focus. One I'd like to highlight is a single new well record of $419 per lateral foot on a nearly 20,000-foot lateral in Northeast Appalachia. The team continues to exceed the limits of what is thought possible by most people. In the Q4, we closed on the acquisition of the Montage Resources, delivered the expected G&A savings, and immediately integrated the assets and our new colleagues into the company. As planned, we moved a rig to Ohio, and we have successfully drilled our first dry gas Utica well on the acquired acreage. This acquisition is a testament to the company's rigorous and disciplined approach of doing the right kind of deal the right way and successfully executing on our strategy. These are both examples of our track record as a proven consolidator. As proud as we are of SWN's achievements in 2020, our team is focused on the road ahead, and our 2021 guidance reinforces the company's key objectives: remaining financially disciplined, optimizing free cash flow at maintenance capital investment levels, reducing debt, and achieving sustainable 2x leverage. Our 2020 performance solidified the foundation on which we will deliver value from these objectives in 2021. Our plan optimizes free cash flow. Guidance is based on a $2.77 per Mcf NYMEX gas price, resulting in projected free cash flow of over $275 million. An increase to a $3 gas price would result in free cash flow estimates in excess of $375 million. These scenarios result in a reinvestment rate between 70% and 80%. Our maintenance capital program will hold Q4 production from our fourth quarter 2021 production flat with our Q4 2020 level, including the Montage assets. True to our strategy, investments will be focused on the highest return projects at strip prices. Given the strength of our inventory, we expect to have activity in all of our core operating areas. Should commodity fundamentals improve further throughout the year, we'll capture that improvement in cash flow and further strengthen our balance sheet through additional debt reduction. Our goal to achieve 2x leverage on a sustainable basis is unchanged, and we will continue to allocate free cash flow to debt reduction until we reach that goal, with expectations that we'll approach 2x by the end of the year. We will continue to progress our best-in-class execution, including remaining a low-cost, efficient operator. As we have done materially over the past two years, we expect to reduce well costs by an additional 10% in 2021. This includes immediate cost reductions that we expect to realize on the acquired Ohio Utica acreage, thanks to our differentiated drilling and completion operations. We protect financial strength through our proactive risk management and rolling three-year hedging program, which provides downside risk protection to our cash flows. We have hedged a majority of our 2021 production and strategically retain upside participation through the use of collars. We've also protected most of the natural gas basis differentials against the risk of widening basis in the Appalachia Basin. An integral aspect of who we are as a company is embodied in our ongoing commitment to ESG excellence and transparency, as documented in our seventh annual corporate responsibility report. As we discussed before, we believe that natural gas is foundational to a low-carbon future, and we see SWN as a leader in that effort. Our focus has been on reducing methane intensity, favoring this metric because it benefits the areas in which we operate. Water conservation is also a core part of our environmental and social effort. In 2020, we achieved our fifth consecutive year of freshwater neutrality, returning as much fresh water as we use back to the local watersheds in the communities where we work and live. Remaining at the core of our strategy is a commitment to the right people doing the right things. Our success depends on the alignment of a fully engaged, diverse, and inclusive workforce nurtured by our high-performing core value-driven culture. Let me now turn over to Clay for some operational updates. Thanks, Bill. 2020 has been an unprecedented year. Through it all, we have maintained our disciplined approach and outperformance mindset to deliver on all of our operational targets. Despite the ongoing pandemic, we have successfully maintained continuous operations and achieved company record safety and environmental performance. I would like to thank the entire operations organization for their continued commitment to delivering high-end results regardless of what's happening around us. Let me start with a few 2020 highlights. We demonstrated best-in-class execution, leveraging innovation and technology to maximize the value of our assets. We lowered costs, reduced cycle times, drove efficiencies, displayed agility, increased well productivity, progressed our resource-to-reserves effort, and enhanced returns. On the cost front, we beat our well cost target, averaging $637 per lateral foot for the H2 of the year. As Bill mentioned, we also achieved a new single well cost record of $419 per foot on a 19,700-foot lateral in Northeast Appalachia. We continued to reduce our cycle times through increased operational efficiencies across drilling, completions, and facilities. We mentioned one example of completion efficiencies in the Q3 with our double zipper frac completion, which increased completion stages per day and reduced costs. This and other efficiencies allowed us to deliver wells to sales at the high end of our guidance range while investing $899 million, which was at the midpoint of our capital guidance. Getting more done for less. Our operational agility was exhibited earlier in the year when we shifted activity to high rate, high volume gas wells in response to the COVID-related demand destruction, resulting in a higher percentage of gas in our total production. Total reported net production for the year was 880 Bcfe, including a full quarter of Montage. Our Q4 production averaged a little over three Bcfe per day. Increased well productivity and well cost reductions drove our proved developed F&D costs down for a third straight year and 25% year-over-year to $0.40 per Mcfe. Reported year-end proved reserves were 12 Tcfe, which included 1.4 Tcfe of positive performance revisions and 741 Bcfe of reserve additions. Due to historically low backward-looking SEC prices, we had a 4.4 Tcfe downward price revision, primarily related to the liquids rich PUDs, which at today's 2021 strip prices would fully return to our proved reserves. The reported PV-10 value of $1.85 billion would increase to nearly $6 billion, assuming the same proved reserves and using the 2021 strip at the beginning of the year, which was 2.70 per Mcf NYMEX gas price and $48 per barrel WTI oil price. With the addition of Montage, our total resource potential has increased to 57 Tcfe. Of our approximately 5,400 future drilling locations, over 1,150 are economic at current strip pricing. Our ongoing resource to reserves effort has continued to progress inventory resource into proved reserves. In 2020, in our Northeast Appalachia area, we converted approximately 700 Bcf of resource into reserves through ongoing leasing efforts, the dual target program, and Upper Marcellus testing. The combination of all these efforts led to enhanced returns in our 2020 program. Now let's turn to our 2021 plan. Our maintenance capital program will have an investment profile that is relatively flat in the first three quarters, followed by a reduction in the Q4. Given the competitive strength of each of our development areas, investment in our highest return projects is expected to result in a roughly even split between liquids rich and dry gas assets. We currently have five rigs running and three completion crews. In Southwest Appalachia, approximately 50% of our wells to sales will be super rich, with the remainder split evenly between rich gas wells in West Virginia and dry gas Utica wells in Ohio. Included in our NGL production guidance, we expect to have some ethane rejection in the Q4 based on the strip prices. Like we have done in prior years, we plan to maximize the value of our ethane, based on recovery rejection economics throughout the year. In Northeast Appalachia, our investment will be focused in the Lower Marcellus, supplemented by dual target wells, where we leverage innovation to capture undeveloped Tier 1 acreage and resource in both the Lower and Upper Marcellus. This plan is expected to result in total annual net production of approximately 1.1 Tcfe, or an average of three Bcfe per day. The production mix is expected to be roughly 80% natural gas, 16% NGLs, and 4% oil. Our relentless cost focus continues into 2021. Well costs are expected to average $600 per lateral foot, a 10% reduction from 2020. We also expect to increase our average lateral length to 14,000 feet. These averages include our Ohio Utica wells, which due to their greater vertical depth, are estimated at $725 per foot, which is $100 per foot reduction from wells previously drilled in the area. I am really proud of what our team accomplished in 2020, and look forward to continuing to deliver strong operational results again in 2021. I'll now turn it over to Michael for the financial results. Thanks, Clay. Good morning, everyone. As mentioned earlier, we finished the year strong, reporting quarterly adjusted net income of $119 million, EBITDA of $276 million, and net cash flow of $249 million when excluding one-time non-cash charges. This cash flow exceeds the $194 million of capital investment during the Q4, resulting in a $55 million of free cash flow. Looking back at our 2020 financial highlights, many related to our proactive balance sheet management, repurchasing $107 million of bonds at an average 33% discount. We also enhanced our liquidity by increasing our borrowing base to $2 billion, and protected our financial strength by accessing the capital markets following the Montage acquisition announcement, and utilizing the $500 million in net proceeds to call the Montage 2023 senior notes upon closing. Another financial highlight of 2020 was the realized gains from our dynamic hedging program. SWN's risk management strategy and disciplined practice enabled the company to deliver $362 million in hedge gains, including a $76 million hedge gain in basis hedges. As part of our earnings release yesterday, we also provided detailed 2021 guidance where we will continue our financial discipline and further strengthen the balance sheet. As Bill mentioned earlier, we are poised to deliver meaningful free cash flow, which we plan to put towards debt reduction in order to achieve our sustainable 2x leverage objective. This is supported by our risk management strategy with the majority of our expected production volumes hedged, utilizing instruments that provide downside protection while providing exposure to higher prices. In fact, 80% of our hedges on natural gas provide access to this upside through the use of collars. In addition, we've protected over 75% of our expected natural gas production against widening basis differentials through our transportation portfolio, firm sales, and basis hedges. As we experienced for ourselves with recent national weather events, increased demand and declining storage levels are providing support for improving fundamentals for both natural gas and liquids. With the improvement in the 2021 natural gas strip prices, we expect our price realizations to increase by nearly $0.70 per Mcf before the impact of hedges. Our 2021 natural gas discount to NYMEX is expected to be in the $0.69-$0.84 range, which includes an expected $0.07-$0.09 gain on basis hedges. The Q1 discount will be narrower in the $0.40-$0.50 discount range, net of an expected $0.15-$0.20 gain on basis hedges, as our diverse transportation portfolio positions us to capture premiums associated with winter weather. In the Q4 of 2020, we reported a nearly $5 per barrel improvement in NGL prices compared to the prior quarter, and expect the strength of NGL prices to continue in 2021. Our full year guidance of 30%-38% of WTI range is based on $50 per barrel WTI. The Q1 is expected to be on the higher end of that range, with expected realizations reaching 36%-42% of WTI. Our disciplined execution of our strategy has positioned the company to capture value from this improved price environment, which, combined with our stringent cost management, balance sheet strength, and increased scale, provides momentum to deliver increased value in 2021 and beyond. That concludes our prepared remarks. Matt, if you could, please open the line for questions. We will now begin the question- and- answer session. To ask a question, you may press star then one on your touch tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. In the interest of time, please limit yourself to two questions and re-enter the queue for any additional questions. At this time, we will pause momentarily to assemble our roster. Our first question will come from Neal Dingmann with Truist Securities. Please go ahead. Morning, guys. Good details so far. You guys hit on this a little bit. I'm just wondering if you could maybe expand a little bit on how you think about allocation towards your super rich and dry gas. You certainly have ample locations on both. You kind of hinted around this just not long ago in the prepared remarks, but I'm just wondering if you could talk around that a bit more on how you view it, either maybe just this year based on prices and then maybe on a longer-term basis. Yeah. Clay Carrell can give you some more detail. Our past, present, and future practice is to take our inventory of wells and force rank them on economics and strip pricing, liquids gas basis, NGLs, and then force rank them, and the prioritization for investment is sourced from that. There's obviously a lot of levers that you have to look at, but that's the root of how we do capital allocation here, based off of economics. Yeah. like we. Go ahead. I'm sorry. Sorry. A roughly even split between the dry gas and the liquids rich. In the liquids rich, roughly half of that, or the majority of that, I'm sorry, is going to the super rich. Like Bill mentioned in his comments, the economics, given where the current commodity prices are for all of them, make for attractive investments in every area. As we move through the year, should we see some change, as exampled in our comments around COVID, the reaction to COVID, we have the ability to move investment from place to place, and we do that. Very good. Then just lastly, could you just talk kind of when you think about maintenance capital and all this year, really just how you think about sort of just service and other inflation costs sort of this year into next? We're expecting a bit of deflation in our cost in both areas, somewhere near 6%, a little more than 6% in Northeast, a little less in the Southwest. Remember that we drill 100% of our own wells with our own rigs. We have one frack fleet that just augments the contracting frack fleet. We're insulated from some of those cost changes, but that's about what we see. Makes sense. Thanks so much for the details, guys. Sure. Our next question will come from Brian Singer with Goldman Sachs. Please go ahead. Great. Thank you, and good morning. Morning, Brian. My first question is with regards to the leverage in the balance sheet. You mentioned the potential to be at 2x leverage by the end of the year, and wondered what the key markers you're looking for on either a absolute or on the metric itself, leverage metric, to have confidence that leverage can be sustained, and at what point you would look towards consideration of incremental return of cash in forms other than paying down debt? Hey, Brian, this is Michael. Hey, appreciate the question. No, I think you hit it on its head, right? The sustainable part is a big component of that. Obviously, 2x is the objective. As you get down there and you look at forward strip pricing, the business plan, all those things, we'll continue to drive costs out. As you get to that point and feel that you're going to be at that 2x or under on a sustainable basis, all those things get back on the table, including returning capital to shareholders. We'll take a look at that as it gets closer to being achieved. That's kind of our way of thinking right now. We just want it to be a sustainable, not a blip on the radar. Got it. Thanks. My follow-up is with regards to the MR acquisition, a couple-part question. First, as you've integrated the assets, what have you noticed of the advantages that Southwestern brings to the table versus any learnings from the expertise at MR? Number two, while it may be early on, does what you're seeing make you more or less willing to consider additional consolidation? I'll hit the first part of it, Brian. We have seen opportunities that we've already started to take advantage of initially around the field LOE and how we can use some of the supply chain benefits that we have to lower some of the LOE there. That has started, and we've already seen some benefits. As Bill mentioned, we already drilled one of the Ohio Utica wells. We're seeing beneficial costs on the drilling side of it, using our rigs and using the operational execution efforts that we've used on our assets, and they're showing up on those also. We're seeing some savings there. When we move into the completion phase, what we are going to utilize the data analytics approach that we use on our own completions to make sure we're customizing the design unique to what is offering the best economics in an area. We expect to see more efficiencies there, as we move into the completion phase. The assumptions that we used going into the acquisition are confirmed by where we are now. The asset and the people are fully integrated. Just like before, we believe consolidation is something that makes sense, as long as you get the right deal and done the right way. We think we demonstrated that. We continue to study the market. Anything more than that, we'll talk about if and when we do so. Thank you. Yeah. Thank you. Our next question will come from Noel Parks with Tuohy Brothers. Please go ahead. Good morning. Morning. Morning. Continuing on the consolidation theme, I'm just thinking of given the age of the Marcellus, the play has now been around quite a while. Are you seeing opportunities in the basin where maybe there's acreage that was capital starved and hasn't really had much in the way of current day drilling and completion technology applied? I'm just wondering if there are sort of hidden gems out there that just might have economics way better than what they have producing out there now. I think from experience, we have found that different companies focus on different things, priorities across their portfolio. If you're able to pick up either acreage or a company at a great price and apply some of the things that you do in your own business, then we're very confident in that there's opportunity. I think I'll leave it here that we do believe in the benefits of consolidation and scale, and we're going to continue to study it. When we did Fayetteville, we told the world that we were selling Fayetteville to get the competition up, which lasted through the entire time we owned it. On this side of it, we tend to go under the radar and study it and make something happen before we talk too much more about that. I know we have a good idea. We've been in the basin a long time. We understand it. We're looking at every angle. Great. Appreciate it. My other question is, now that you're down the road a ways with Well, I guess we're a quarter in or so with Montage acquisition and the integration. We're kind of in an era of real bullishness for nat gas, and NGLs as well. With those having firmed up some, do you have any revised thoughts on infrastructure investments, either in your prior portfolio or over on the Montage side? Let me comment on something I think I heard first, in that we're in the first part of integrating Montage. We are fully integrated. That's a done deal. It's integrated. We're solidly looking forward. We're delighted we have it, and we're moving on, and the team is better because we have new people as well. That's exciting. I think infrastructure comes in a lot of different forms. We currently have a firm takeaway capacity out of the Appalachia Basin, just a little more than 1.7 Bcf a day out of the Northeast, and a little short of 1.4 Bcf a day out of the Southwest, which is perfect for us. We're using all that we have, and we are always working to optimize that. Our gathering infrastructure, our processing infrastructure is all right-sized and right-timed. We work really closely with our gatherers and processors. The one thing you don't want is to have underutilized infrastructure because that doesn't make you any money. We're very careful about that. We've done this before, if there's a line loop or something that can bring greater value and it meets the same economic hurdles or better than our other investments, well, then we certainly study that and look at that. I think we're in We're in pretty good shape. We continue, again, to look at it long- term. We have a water system that we continue to gain significant benefits on a per-well basis as we expand drilling in some of the areas in West Virginia and in Pennsylvania, quite frankly, and need to add onto that. We can do that. The core part of it's robust and complete, and therefore, the incremental additions are quite affordable. We tie it all together because it is, in our mind, a system opportunity, and we look at it in that way. Thanks a lot. You bet. Our next question will come from Charles Meade with Johnson Rice. Please go ahead. Hi, Charles. Good morning, Bill, to you and your whole team there. Thank you. I hope you guys all made it through reasonably well, all that debacle last week, but hopefully, that's gladly in the rear view mirror. My question is actually about your well results by area, and more specifically, those West Virginia rich gas wells. You just look at the rates across the different windows that you guys disclosed in your press release, it really looks like that rich gas, I think it's mostly West Virginia, really stands out. Can you talk about how representative that average rate of 23 million a day is for you guys, and if that's kind of indicative of that window being at the top of your investment stack right now? Hey, Charles. We are very happy with the results we're seeing in the rich gas area. We've started maybe in late 2019, applying the new completion approach and drilling techniques that we've been using, and it's all showing up in really good performing wells. We had a pad come online in that rich area in the Q4 with really high initial rates touching $40 million a day per well. Another example of what you are saying, when you say the top of the investment stack, though, we've got solid economics in all the areas, given where the commodity prices on a go forward strip are right now. Our rich area with the high percentage of oil definitely benefits economically from current oil prices and then obviously gas prices improving also. It is part of the overall capital allocation plan that we're laying out, and as Bill mentioned, we can adjust if we start to see a favored commodity. Right. Thank you for that detail, Clay. Perhaps just a small question, but related to that, what are you guys seeing with the local propane markets up there in Appalachia? There's kind of been a run on supplies across the U.S. here. Charles, this is Jason. You're right. What we continue to see in the Northeast from a propane perspective is the basis continues to tighten up in that area. Also that area has the ability to feed up towards the Michigan area, and we know what happened last week, whenever they were looking for extra propane in Michigan. You're right. There's definitely a stronger market for propane up there in the Northeast right now. All right. Thank you, gentlemen. Thank you. Our next question will come from Doug Leggate with Bank of America. Please go ahead. Good morning. Hi, Doug. This is John Abbott. Oh, it's actually John. Doug's on the other line. Thank you for taking our questions. Our first question is on the Montage assets. You did a really good job in terms of explaining your approach to allocating capital. With the acquisition for Montage, you did receive quite a bit of liquids production. The majority of your activity focused on your West Virginia assets in the liquids window. How do you think about the trajectory of liquids in Ohio? Is there a benefit at some point to increase activity in Ohio to maintain that liquids production? I guess the follow-up question would be, if you let those assets decline, is there a point where divesting those assets might make sense at some point if you don't put capital towards them? Yeah. John, I'll start on the answer there. The way that we have optimized our capital allocation for the very first year has us spending dollars in the dry gas Utica in the Montage assets, A, because of their economic benefit, and B, it's going to benefit the SWN legacy assets by us gaining that incremental operational and technical knowledge drilling those Utica wells. In 2021, the Montage asset liquids volumes will decline some, but as we always talk about, we rack and stack based on highest economics, and we will allocate capital to the Montage liquids-rich assets as we continue the development over time. Thank you very much. Our next question will come from Holly Stewart with Scotiabank Howard Weil. Please go ahead. Hi, Holly. Good morning, gentlemen. Brittany. Good morning, Holly. I thought maybe, Bill, I'd start off with just a bigger picture question. I think several of your peers have provided long-term free cash flow targets for just the business under sort of these maintenance scenarios that we seem to be happening throughout the industry. I was wondering how you think about Southwestern's long-term organic free cash flow capabilities. Yeah. Great question. We don't typically release five-year plans, and historically haven't, but I can tell you that you can probably see what the portfolio will do at this roughly $2.75 NYMEX gas price this year, and maintenance capital levels going forward. I think you can kind of map out that plan, and map out what that free cash flow looks like. At these price levels, and with all the work that's been done on cost and on revenue enhancement and optimization, et cetera, I think we've got a very solid plan going forward. Okay. Maybe one more in the weeds for Jason or Michael. It looked like NGL realizations for the Q4 were certainly much higher than we were expecting. Anything to highlight there in 4Q and maybe that we can kind of carry forward or look into 2021? Yeah, Holly. That's a good question. This is Jason. I really think what happened in 4Q is there was definitely a run on commodity prices. As we look into 2021 and beyond, we talked about it a while ago on the call that we're starting to see those basis markets continue to tighten up on some of the NGLs up there. I think that's what's driving some of that, along with the outright price move up on all of the purity products. Okay. Maybe just one more follow-up, if I could. Clay, you mentioned the five rigs and three crews. How should we expect that to trend over the course of the year? Yeah. It'll trend similarly to the capital profile that I talked about, where the first three quarters, the capital spend will be flattish. The H1 of the year, I would say, is close to that five and three average. As you move into the Q3, it will have a slight reduction, and then the Q4 will be a little bit more of a reduction on activity. Okay. Thank you, guys. Thank you. Our next question will come from Kevin Cunane with Citigroup. Please go ahead. Morning, Kevin. Hi, good morning, everyone. Just a quick follow-up on NGLs. Your $3 case, obviously stronger liquids prices generally are bringing up that free cash flow expectation. I think on condensate, it's over 90% hedged, and on liquids or NGLs, it's around 60%. With present Mont Belvieu above where your current swap prices are, is there additional, I guess, need or want to layer on just more hedges on the NGL side of the business? Or are you kind of comfortable where you are? This is Jason. I think when we look at NGL prices, if you look at the curve right now, it's highly backwardated. What we have done is continue to layer on NGL hedges in over the next two to three months, trying to take advantage of the backwardation in the curve and the prices where they are right now. I think as we look out into next year, we know that based on the outright storage levels and the days of supply around propane, that something's going to have to change to be able to get the volume that we need in storage to be prepared for next winter. I think we'll continue to hedge a little more near term, but longer term, I think we're pretty comfortable where we are right now given the fundamentals. Really, our hedging program is directly connected to our whole risk management program. We have a very clear strategy around ensuring that the downside in any commodity price environment that can swing radically one way or the other for the simplest of things, that the downside's protected, and we utilize the various tools of hedging to enable us to capture upside, especially in a volatile market like this, through the use of collars, as we said before. We were not going to leave the cash flow unhedged and just play the market fundamental views. It's not who we are. Understood. I appreciate the additional color. You bet. Again, if you have a question, please press star then one. Our next question will come from Arun Jayaram with J.P. Morgan Chase. Please go ahead. Yeah, good morning. Arun Jayaram with J.P. Morgan. Hey, Arun. Good morning, Bill and team. Clay, let me start with you. I know that you reduced your cost targets. I think your previous outlook comments were less than 650 a foot. Now it's down to 600. Can you talk about some of the drivers of that lower cost objective? I know you mentioned the double zipper fracs, maybe the lateral lengths, but maybe wanting to understand a little bit more about what's driving the lower cost per foot outlook. Yeah. You hit on a bunch of them. I mean, our lateral length continues to grow, and our ability to effectively execute on those longer laterals continues, and so that's a component. We have seen some supply chain deflation in our go-forward costs, and so that's a small piece of it also. The innovation and the efficiencies around finding ways to do the jobs quicker, where they end up costing less, and looking for every efficiency around the whole completion and the drilling side and the facility side. We're doing prefab of facilities offsite so that we can standardize the facilities and lower the cost there. When we bring them on location, the hookup is much shorter and much more cost-effective. It's really continuing on the momentum of keeping looking for ways to bring those costs down, and our team is motivated around that, and they keep finding them. Great. Just a kind of a broader question around the Appalachia Basin as a whole. One of the things that has been brought up by some of your peers is just as an industry, you can talk about, call it Tier 1 inventory, pardon me, exhaustion. I was wondering, Bill, maybe you could just talk about, from your seat, what your thoughts are on Tier 1 inventory, what's left for the industry, and including for Southwestern. I think it's a great question. I kind of look at it like this. Tier 1 inventory declarations made years ago are suddenly changed as we can do more, achieve more, develop more, and get more out of everything we do. We've got 57 trillion cubic feet of resource all around our business. We've just added a bunch of reserves from that through additional study, additional performance, lower cost, et cetera. I think that the opportunity or the belief that Tier 1 inventory is running out or people casting those stones on one another just out of some kind of competitiveness, we believe that focusing on extending the Tier 1 inventory we have, we talk a bit about dual target wells and our Utica acreage, all very prime Tier 1 inventories with trillions of cubic feet of resource that we actively work to convert to reserves. We're not in a place where we're running out, and we're actually in a place of increasing and driving, again, driving resource to reserves and driving improvement in any of our areas, and through all the innovation and the operating capability that we have. Great. Thanks a lot. This concludes our question- and- answer session. I would like to turn the conference back to Bill Way for any closing remarks. Thanks, Matt. I appreciate it. In closing, I want to hope that you got a flavor for the incredible innovation, commitment, outperformance by a team of incredible people working some very strong assets in Appalachia. There's more to come. We've set up 2021 to be a very exciting year, full of anticipated records, full of taking the company forward. We remain focused on the operating and financial side of the business, but the core values of looking after the environment, looking after safety, looking after the communities where we work and live aren't just paragraphs in a note, but they are who we are, and we'll continue to play that leading role going forward. Thanks for everybody for their time. Thanks for the questions and the interest in Southwestern. We look forward to catching up with you in person down the road. Have a great weekend. This concludes the Southwestern Energy's Q4 2020 earnings call. You may now disconnect.