Alpha Metallurgical Resources Inc (CTRA) — Q3 2020 Transcript

Thank you, Kay and good morning. Thank you for joining us today for Cabot’s third quarter 2020 earnings call. As a reminder, on this call, we will make forward-looking statements based on our current expectations. Additionally, some of our comments will reference non-GAAP financial measures. Forward-looking statements and other disclaimers, as well as reconciliations to the most directly comparable GAAP financial measures were provided in yesterday’s earning release. 2020 has proven to be a challenging year on many fronts across the global market. I hope each of you and your families have remained safe and healthy through this unprecedented time. The natural gas industry specifically has had its fair share of challenges driven by the lowest NYMEX price on record in the last 25 years. However, the strategic actions we have undertaken since we first began leasing in the Marcellus Shale in 2006, which includes numerous investments, higher cost assets with procedures utilized to maintain a healthy financial position, have positioned our company for continued success, even in the very lows of a natural gas price cycle. While we are certainly not immune to lower natural gas prices, our low-cost structure, strong balance sheet and disciplined capital allocation strategy allow us to continue to generate corporate returns and free cash flow even in this current price environment. The good news is that we are already experiencing significant tailwinds for the natural gas supply and demand outlook, driven by large declines in natural gas supplies across the U.S. coupled with an improving demand outlook heading into winter heating season. As a result, since early March, we have seen over a 35% increase in the NYMEX futures for 2022 to current levels that are above $3, which would result in a material expansion of net income, free cash flow and return on capital employed next year. While we're extremely proud of our team's ability to successfully manage our operations during the ongoing pandemic, while generating positive free cash flow in this low-price environment, we believe better days lie ahead for Cabot in 2021 and beyond. For the third quarter, specifically, we generated adjusted net income of $37.3 million or $0.09 per share and delivered a free cash flow breakeven program, despite a 26% decline in realized natural gas prices relative to the prior year comparable period. Our production for the quarter was approximately 2.4 Bcf per day, which was inside our guidance range, despite price curtailment during the last 13 days of the quarter that were not included in our original guidance. Our unit cost for the quarter improved relative to the prior year period, and we continue to look for opportunities to improve on our peer-leading cost structure even in a flat price environment. On the operational front, in yesterday's release, we provided the initial results of our five Upper Marcellus tests this year, which have been producing for an average of 140 days. Based on the curve fit to date, these wells are tracking above the average EUR of 2.7 Bcf per 1,000 lateral feet that we reported at year-end for our 2018 and 2019 Upper Marcellus wells. We believe these results continue to demonstrate the productivity of this distinct economic interval across our 173,000 net acre position in the core of the dry gas window in Northeast PA. As a reminder, we plan to allocate a modest amount of capital to the Upper Marcellus annually as we continue to refine our well design and lateral placement across this interval, with the intent of moving to full development of our Upper Marcellus inventory at the tail end of this decade. We also continue to evaluate the optimal lateral length across our asset, and at this point, we expect to develop the Upper at an average lateral length greater than 10,000 feet, which would provide significant well cost savings, further improving the economics of our Upper Marcellus inventory. Despite the questions we continue to receive on this high-quality reservoir, we have over 60 Upper Marcellus wells that, on average, have been producing for over five years, which continue to reinforce our confidence in the opportunity that awaits us when we move to the full development of this section. In yesterday's press release, we also reaffirmed our fourth-quarter production guidance range, which includes the impact of previously announced price-related curtailments as well as our full-year production capital guidance. While our current year expectation for differentials in 2020 is slightly wider than originally anticipated, which is primarily due to wider local basis in September and October, resulting from weaker shoulder season demand and the east storage levels nearing capacity. However, we are still on track to generate positive free cash flow and far exceed our return of capital target of at least 50% of our free cash flow for the fifth consecutive year. Despite reducing absolute debt earlier this year through the repayment of our maturity in July, we have seen a moderate increase in our leverage ratio due to lower EBITDAX resulting from the low price environment. However, we still ended the quarter with a healthy debt-to-EBITDAX ratio of 1.5 times and expect significant deleveraging in 2021 through a combination of higher EBITDAX resulting from improved price realizations and lower absolute debt levels as we plan to utilize a portion of our expected free cash flow next year to retire our 2021 debt maturities. We also initiated preliminary guidance for 2021. This maintenance capital program is expected to hold production levels roughly flat year-over-year at 2.35 Bcf per day from a capital program of $530 million to $540 million, representing a 7% reduction in capital spending year-over-year. The reduction in capital is driven by a combination of operating efficiency gains, resulting from the utilization of leading-edge technology across our operations and lower anticipated service costs. Our program for next year would generally generate a sizable expansion in free cash flow year-over-year, allowing us to not only cover our base dividend and retire $188 million of maturing debt, but to also opportunistically return incremental levels of capital to our shareholders. We remain committed to returning a minimum of 50% of our free cash flow to shareholders annually, which we have far exceeded over the last five years and will continue to evaluate the prioritization of incremental capital return between growing the base dividend, special/variable dividends, and opportunistic share repurchases. It is our belief that depending on where we sit in the commodity price cycle, certain capital allocation options offer more value creation than others and that maintaining financial flexibility is paramount, especially in a cyclical industry like ours. We are often asked what price level we would consider investing in growth again. While we have never believed in growth for the sake of growth, we do believe there are certain price environments that warrant disciplined investments in the expansion of operating cash flow, especially as the lowest cost producer. However, with the current natural gas futures in 2022 and beyond in backwardation, and well below the $3-plus environment we are anticipating in 2021, we do not believe this is the appropriate time to consider growing our production base. We do have new takeaway capacity coming on the Leidy South expansion project, for which a partial path in service was recently requested for as early as this December. This project will provide us additional access to premium markets in the mid-Atlantic. So, if natural gas prices continue to rise in the out years, we have new outlets to support incremental value-enhancing growth. However, as we previously stated, our capital allocation priorities for next year are focused on maintaining our current production level, funding our current dividend, retiring our 2021 debt maturities, and opportunistically returning incremental free cash flow to shareholders. In order to ensure that we are able to deliver on these strategic objectives for 2021, we have begun layering in hedges by opportunistically locking in downside protection while maintaining some level of market price exposure if natural gas prices continue to move higher. Specifically, we have primarily targeted costless collars approach with a weighted average floor that generates a compelling return on capital employed and a level of free cash flow while still providing the potential for upside to the ceiling if prices remain higher. Currently, we have approximately 23% of our volumes hedged through financial contracts and an additional 16% of our volumes protected through floors in our physical sales next year. We will evaluate opportunistically adding to our hedge position and improving on our current floors and ceilings. Lastly, I'm pleased to announce that yesterday we posted our inaugural SASB sustainability report to our website. At Cabot, we strive not only to be a leading independent producer of natural gas, but to also be a leader in safe, responsible operations and to minimize the impact of our operations on our employees, our community, and the environment. Our success in developing abundant unconventional supplies of natural gas helps to support the goal of reducing total greenhouse gas emissions while achieving energy independence in the U.S. Cabot's legacy of corporate responsibility places high value in operating with respect and care for people, property, and the environment. We believe this commitment along with our operational success will continue to create strong value for our shareholders and other stakeholders in our communities. We are proud to report that our greenhouse gas emissions intensity for 2019 was 1.3 tons of carbon...

3.1.

Scott just corrected me, 3.1 tons of CO2 equivalent per 1,000 barrels of oil equivalent. This is significantly lower than the production weighted average intensity of 15 tons of CO2 equivalent per 1,000 barrels of oil equivalent for U.S. onshore assets, as reported by industry based on the 2018 publicly available data. We currently evaluate new opportunities and continuously do this for emissions reductions to ensure that Cabot is among the most efficient and lowest emitting domestic producers. We also believe our elimination of flaring in the Marcellus, which began in 2014, and our strong performance in water management, including recycled 100% of our water recovered in our Marcellus drilling, completion, and production operations, which began in 2011 will continue to make us financially and environmentally superior as pressures for lower carbon and water conserving economies intensify. Hope you will each take a good look at our SASB report; we're extremely proud of how we measure up against peers and the desires of the investment community on all the metrics included in our report. In summary, Cabot's track record of disciplined capital allocation focused on generating improving corporate returns and increasing return of capital to shareholders, which is underpinned by strong free cash flow generation and an ironclad balance sheet, as well as our continued focus on corporate responsibility demonstrate our history of safe, responsible operations that support the goal of reducing total greenhouse gas emissions and position us favorably, not only today, but for decades to come as it is our belief that natural gas will continue to play a significant role in the domestic energy supply going forward. And with that, Kate, I will begin to answer any questions.

Hey, guys. Just a quick question here on the gas markets. To your point, we've seen NYMEX futures prices strengthened materially over the last month, which is certainly quite encouraging. I guess, at the same time, we've seen quite a bit of weakness in physical markets in Appalachia. And I guess a lot of the other key gas-producing regions around the U.S. So it definitely looks like there might be a bit of a disconnect in terms of what we're seeing in futures versus physical? Just kind of wanted to get you all's opinion in terms of what you think might be driving some of that? And do you think those prices need to start to converge as we get deeper into the winter here?

Yeah. Thanks, Leo. I'll turn this to Jeff in a second here, but we have seen the shoulder months, September and October being difficult. Typically difficult at that time of year, but the storage levels exacerbated that perception for a while. But we did see week-over-week injections in a comparative sense be less than certainly less than last year, and the majority of them less than the five-year average. I think that is moving into now – to your point about convergence, I think that's moving into now the market converging rapidly, as we've seen towards the latter part of October, an increase in the physical space. I'll let Jeff make a comment also.

Yes, sir. Good morning. Dan hit the nail on the head with the storage number, primarily in the East. The East typically builds up, of course, their storage levels. But this year, they built quite early. And so, with some really mild shoulder months, we did see our basis differentials widen out a bit in contrast to what NYMEX has done. When you look at NYMEX and what's driving it, you see an exit rate on U.S. dry gas production close to 5 Bcf a day less than the previous year. Obviously, that's helping NYMEX. You also see the capital discipline in the marketplace today, particularly among the gas guys. That helps NYMEX, of course. So we're encouraged in a normal winter, and we're prepared for that for these basis differentials to return to somewhat more normal levels.

Okay. And just to follow-up on that. Clearly, to your point, we're starting to see physical prices improve a little bit. Would you guys expect that those physical prices continue to rise this winter? But is there also a risk that maybe we see some downward pressure on those NYMEX prices for kind of prices to meet a little bit more in the middle?

Well, again, I think we're early into the winter weather season, and it's encouraging. We had snow today in Boston. That's always a good thing in October. But it's going to be somewhat of a weather play. We've worked really hard to insulate ourselves from just being a weather play. We've got a lot of physical fixed-price contracts in place with high floors. We have, as Dan mentioned, started our hedging program. But NYMEX is a result of demand decline and demand is a function of weather in a lot of cases. But we've – again, we're prepared for that. I think the increase in NYMEX over the last five months including a big increase in 2020 too over the last five months is a real encouraging factor.

I'll also add that, where the prices are right now and you look at just the fundamentals that are out in front of us, you do have an undersupplied market going into this winter with an undersupplied market. If you do have a colder winter than expected, it's going to certainly move the price up. But I think also equally as important, if you have a normal winter or even a warmer winter with the undersupplied market, I do think there is a higher floor that's been placed under the market based on these fundamentals. Particularly where we have seen a very strong rebound in the LNG going from back in, what, March, April, 3 Bcf a day exports to recently 9 and pushing 10 Bcf per day exports in LNG in the last couple of days.

Very helpful color for sure, guys. I was hoping you could maybe just touch base on the returns of capital. Clearly, to your point, Dan, there should be significant excess free cash flow in 2021. You kind of talked about a number of different options, variable dividends, special dividend, buybacks clearly, to your point, clearly, market conditions at the time in terms of where the stock isn't more gases, will determine a lot of that. But can you maybe provide a little bit more color in terms of how you kind of think about those different options for next year and kind of what sort of the key things you're looking for to choose one versus the other?

Well, as I mentioned, our first commitment is to our stated dividend. We also are going to take care of our $188 million maturity, that's important. You look at our history. In the last five years, we have returned a significant level of capital to our shareholders over $1 billion. We've had five increases in our dividend, and we have also bought back about 14% of our outstanding shares in repurchases. But for prioritization, as I mentioned, dividend, maturities, it has been our intent to deliver a minimum of 50% of our free cash flow back to shareholders. We'll continue to do that. We referenced earlier a special dividend consideration, variable dividend proposition that some have outlined and made it a little bit more formulaic. We have not gotten to that stage yet. But if you look at our history as an example of what this management group considers and the Board has considered, we have given back a lot of our free cash flow over and above the 50%.

Okay. Thanks for the color.

Thank you.

Good morning, Dan, to you and your whole team there.

Hey, how are you doing, Charles?

Well, I am doing very well. That’s kind of you’ve asked. Thank you. Dan, the outlook for price is really, really interesting. And of course, we've got some rosy possibilities out there, but we'll have to wait and see. What I'm curious about is what levers you may have or may have set aside on your 2021 plan? And as I look at your capital guide, with just a $10 million window that looks like to me, that the message is, even if we do see a higher price spike, you guys aren't going to change your plan at all? And I guess my question is, is that the right read to take from your CapEx plan? And the follow-up being, are there other levers you could pull perhaps something like increased compression if you happen to see really strong spot prices for a couple of months?

It's a good question and we referenced in my comments that we're not going to grow for the sake of growth. And that there is a point that capital efficiency would make sense to allocate. But really, the way we see the market right now, Charles, and even at a slightly higher price point than where it is right now, we think that the capital program that we've laid out in the range of $530 million to $540 million is the appropriate program. We think a maintenance program is appropriate at this stage. You have to look at right now the early winter season, you have to look at there is still a couple of hundred Bcf over comparison between this year's storage levels and the five-year average and last year's storage levels. We are moving into an undersupplied market. We have uncertainty with winter out in front of us. So, I think that from our perspective and looking at what's prudent for the health of Cabot and this industry, we are better served to stick with a maintenance capital program, and that's what we're going to do.

Got it. Okay. I want to follow up on the Upper Marcellus. Can you provide more detail regarding whether each of those wells is individually above the 2.7 type curve, or is it the average of those wells that is above the type curve? Also, what insights are you gaining from the variations among those Upper Marcellus wells?

Yes. The wells we mentioned are drilled from three different pads in separate areas of the field, and with an average above 2.7, there is variability among the wells. What I'm referring to in my comments is our current capital allocation strategy, focusing on complete zone development. We have a strong barrier between the upper and lower sections, which allows us to analyze any impact from offset wells that were drilled near previously developed lower Marcellus wells. This illustrates the distinct characteristics of the Upper Marcellus. We're continually learning from our fracturing techniques and the landing positions we are evaluating in various sections, making adjustments to our approach to see if there are differences in results. This is an early stage for us, and we are gathering data just like any other operator would when entering a new shale formation. The Upper Marcellus is a new play for us, with around 60 wells drilled so far. We are continuously acquiring knowledge. We apply lessons learned from our experiences in the lower Marcellus, but we also recognize that the Upper is a unique reservoir. As we progress toward full development by the end of this decade, we will be well-informed and prepared to implement greater than 10,000-foot laterals and enhance returns for our Upper Marcellus wells.

Thank you for that. I will call again.

Good morning. Arun Jayaram from JPMorgan. You've talked about the backwardation in the curve, currently not incentivizing you to grow. And it's clear that generating free cash flow is your main priority. But the question is, at what price level would you need to see longer-term in terms of the strip for you to pivot to, call it, some moderate level of growth?

Yes. Higher than where it is. You look at the backwardation and reference to 2022. It is has increased. Jeff referenced, I think, $2.75 million plus or minus is where 2022 is right now. The current strip is north of $3 for '21. We are going to be able to generate with the market what we see today in front of us. We've layered in some good floors to protect a very good program for 2021. That's going to deliver significant free cash flow greater than we've seen this year. Full coverage, we feel on our dividend and debt maturities and also incremental free cash flow above that. We think we're going to be able to see that. We're looking, again, with anticipation on the winter and what it does to the markets. We have for example, gas available for the non-New York market up there in New York. That non-New York market up there last year, as a reminder, averaged about as a $1.70 premium market to NYMEX in the first quarter of '19 that also just as a footnote on what that does to an annualized differential out there and certainly compresses the differential that we see in the in-basin area. So to answer you specifically, I'm just going to focus on and my preference is to focus on right now what I think is better for Cabot Oil and Gas is better to focus on our commitment to a maintenance capital program at this time. We think that is important for the industry, and we think that our commitment and conviction to that at this position in time is proven position to take.

Great. And Dan, just my follow-up, you got the light year expansion coming on next year. Can you talk about any views on how this could impact basis differential and transport costs in 2021 and beyond?

Yes, it's a good question, and I appreciate it. I'm going to hand the baton to Jeff.

Good morning. Yeah, Leidy South is a reinforce project. Not only for Cabot for others in the basin. Essentially, in the Northeast area of the country, this is greater than 0.5 Bcf a day, it's $580,000 a day of new takeaway, a super majority of that gas will be existing gas. It's coming off the Leidy system and maybe a little bit off of Tennessee, for example. So for Cabot's position, $250,000 a day down to the Mid-Atlantic marketplace is will improve price realizations. There's no doubt about that. We're also in a unique position that the Atlantic Coast pipeline was canceled. We felt like there was a little bit of gas supply from that project that was going to compete with us. Since that's no longer there that's another good indicator for capital realizations. Overall, I think the basis differentials in Northeast Pennsylvania for all the pipes will improve significantly, just like the start-up of Atlantic Sunrise project. We're encouraged that there is, in fact, a good possibility that there will be some early service available to the shippers on that project. We're hopeful that that could be as early as this winter. More to come on that, but it's definitely an improvement to get another major takeaway project in place.

Great. Thanks for your color.

Thanks, Arun.

Thank you, good morning.

Hi, Brian.

I wanted to follow up on Arun's first question. You mentioned in your opening comments that the forward curve for 2022 is below the $3 level you’re expecting for 2021. Could you share your thoughts on the price point at which you would transition from maintenance mode? Is this influenced by peer supply costs? Is it a result of a higher cost of capital compared to what was used in the past to manage supply costs, or is there a consideration for returning capital to shareholders beyond your debt paydown target, given that this year was a necessary pause for specific reasons? I’m interested in your overall approach to making that decision.

Well, I really look at the start with the macro environment, Brian. The macro environment has been oversupplied. And that oversupply has made it extremely difficult and challenging for our industry. You can look at the balance sheets across the space, both natural gas and oil producers' balance sheets as a level of stress that is going to be sticky. When you look at the ability to delever in a market that is such a challenged and maybe oversupplied market in light of this pandemic, it is not in our best interest from a capital management standpoint to stress our balance sheet. We think at this period of time, with the prices we see out there that if we are going to see higher pricing, a return of that capital to our shareholders in the form of the dividend, in the form of special or variable dividends also, again, taking care of our $188 million debt maturity, is the most prudent use of capital. If there is a disconnect in valuation, to your point and part of your question, if there is a disconnect in valuation about what we think is a value of Cabot stock, it is not as high priority as a dividend to us, but we have bought back shares in the past, and that’s certainly not off the table in the future.

Got it. Thanks. And then my follow-up is, can you provide any update on litigation with the state of Pennsylvania?

Yeah. To comment on that is risky. I can say this that we have just ongoing discussions on the litigation. We felt like that there is progress being made.

Great. Thank you.

Good morning, guys. Thanks for taking my questions.

Hello, Dave?

Can you hear us, Dave?

Yes. Can you hear me?

Yes. Now I can, yes.

Sorry about that. Good morning, guys. Thanks for the time. Dan, just a lot about your philosophy going forward. I guess I have just two questions. You talked about the 2022 curve, the backwardation there. I guess, longer term of ranking beyond 2022, if we're in the range where you're getting somewhere, including the betas in the realm of $240, $250 of realized gas. If we're thinking 2023 and beyond, is Cabot a product-oriented company in addition to income, or do you still think that this is to compensate contracts for a very long-term maintenance plan with the upside in the commodity just to return in the form of free cash?

Yeah. You are breaking up a little bit, David, but I think it indicated that at a $240, $250 realized, how do we reflect and beyond 2022? How do we reflect on growth versus maintenance? Don't take my statements today as we are going to maintain a maintenance program forever. We understand the value of growth. We understand what growth can do for us. At the right opportunity and when we see the right macro outlay in front of us. If we can feel confident about the macro environment, that growth can be and will be in our future. But right now, today, we are laser-focused on the maintenance program, but I would be surprised if in the future as the macro market continues to improve that we don't consider growth.

Thank you. To follow up, it seems clear that the Appalachian market is now very much influenced by seasonal factors. Weather plays a crucial role, and this past year we faced significant storage challenges, filling up more quickly than anticipated. In September or October, you indicated some production activity. As we look ahead to next year, are you planning to optimize free cash flow? Are you considering adjusting your completions to take advantage of seasonal trends, moving away from shoulder periods where storage issues could be more pronounced, or will you maintain a steady approach throughout the year, addressing needs as they arise?

Yes. We have a very low capital intensity program. We only had and had two rigs, three rigs running for 2020. We've had two frac crews, now one frac crew working up there. Measuring the cadence and being able to time it just exactly right, is difficult because we don't have many pad sites. If you look at our gathering system, even though we have a great header system and we have flexibility within the gathering system, we do manage when and the timing we bring on the gas through the field in order to have the most efficiency of newly produced gas having the maximum positive effect without increasing any area of our header system pressures to where it might reduce older wells that are on the system. So it's a lot of moving parts; we do take that into consideration what you're asking about, David. We do take that into consideration. We have also brought wells on at a lower cadence in anticipation of a better price point looking ahead, if that opportunity is available to us. We will continue to do that in the future.

I appreciate that. If I could just ask one more quick one. One of your peers recently paid PDP 17 for an asset, primarily looking at it as a source of sort of inexpensive free cash, considering that, that's something that you're squarely focused on now on returning capital. Is Cabot out there in the market looking at, in other words, just cheap sources of free cash in the basin that you'd be able to potentially optimize and use some of your currency?

We're always interested in a value proposition. The idea of free cash and one of the luxuries that Cabot does have is we generate free cash. We have an extremely strong balance sheet. We feel good about our organic operation being able to generate free cash. The value proposition of buying assets on a PDP basis, which, I think any asset today if it moves, it's probably going to be on a PDP basis. If it fits in our wheelhouse, we'd consider it. I'll add that every deal that we're aware of anywhere out there, Cabot's internal team does a high level scrub on it. We do also an internal evaluation on, can we have incremental accretive value added to Cabot shareholders on every deal out there. Every single deal that we know about out there, David, we do that. So to your point, would we do it on basin asset? Sure. We look at it because we do that as part of our DNA.

Thanks, Dan. Appreciate the time.

Yes. You bet.

Good morning, everyone, and thank you for the question. I have just one inquiry. Are there any other significant takeaway projects in Appalachia aside from Leidy South, MVP, and the MVP expansion that realistically have a chance of being completed? If not, does that imply that the growth potential for Appalachian production is limited to perhaps another 10 percent, or around 3 Bcf per day moving forward?

Yes, I appreciate the question, and I'll provide an overview before passing it to Jeff. The Leidy South is our immediate focus. There are other projects in our portfolio that Jeff can address. Additionally, we have a business development group exploring local demand projects that will need more infrastructure, but these will not involve long-haul pipes. We've had discussions in the past, although the pandemic has hindered some of these talks and gatherings due to various circumstances. We anticipate seeing localized demand projects in Northeast PA that will generate demand from our gathering system. For instance, the Lackawanna and Moxie power plants serve as examples of local demand projects that don’t require long-haul pipelines. Now, I’ll let Jeff discuss some ideas for the future.

Yes, to address your points about the entire Appalachian and Marcellus basin regarding takeaway and demand, Northeast PA is a central focus for us. We have leveraged the COVID situation to engage with various trade associations and have benefited from numerous webcasts with manufacturers and industrial groups during this time. We are actively involved in site selections for aspects like power, water, rail, highways, workforce, permitting, and tax considerations. This involvement extends beyond our operations to other producers in the Marcellus region. It’s challenging to estimate the overall growth rate for the Marcellus given the in-basin demand projects across West Virginia, Pennsylvania, and Ohio. For instance, West Virginia is set to introduce a few gas-fired power plants next year to replace coal-fired plants, indicating growth across the in-basin landscape. Regarding pipelines, with Leidy South and Mountain Valley, we have a capacity of 2 Bcf per day. We are positioned for the upcoming PennEast pipeline, and phase one in Pennsylvania should receive FERC certificates shortly. If there are no delays, we could see it in service late next year, though further delays would extend construction timelines. PennEast is crucial for our plans. Additionally, a new delivery point, Adelphia, has been approved, offering access to markets in the Philadelphia area, which will complement the proposed delivery points on Columbia and Texas Eastern. I believe we will see several niche projects emerge to serve the producer community in the Marcellus. While I can't pinpoint a specific growth rate for the Marcellus as a whole, there's a lot happening that is quite exciting.

Got it. That’s super helpful. Thanks.

Thank you, Kate, and I appreciate everybody's good questions and attention to Cabot business. 2020, as we mentioned, was an extremely difficult year on a commodity price point. I think we illustrated that even in this lowest price point in 25 years that we can still deliver free cash flow and maintain a great balance sheet and our operation. This has been a while since we've been able to look ahead and anticipate as optimistically as we are, the forward strip. I think the street also is looking at it optimistically with the number of questions that we received today on growth. We feel great about the position. We feel like the challenge of the commodity is going to have maybe going forward, a different floor underneath it. I think, which will also reinforce Cabot's ability in a cyclical market to deliver what we've been able to deliver for the last five years. And that's free cash flow, strong balance sheet, and return of capital to our shareholders. With that, I, again, appreciate it. Look forward to our year-end 2020 call in February, and stay safe through this difficult time. Thank you very much.