Good day and thank you for standing by. Welcome to the APA Corporation's first quarter 2026 financial and operation results conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you will need to press star 11 on your telephone. You will then hear an automated message advising you your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Stephan Aka, Managing Director of Investor Relations.

Sir, please go ahead. Good morning, and thank you for joining us on APA Corporation's first quarter of 2026 Financial and Operational Results Conference Call. We will begin the call with an overview by CEO John Chrisman. Ben Rogers, CFO, will share further color on our results and outlook. Steve Reine, President, and Tracy Henderson, Executive Vice President of Exploration, are also on the call and available to answer questions. We will start with prepared remarks and allocate the remainder of time to Q&A. In conjunction with yesterday's press release, I hope you have had the opportunity to review a financial and operational supplement, which can be found on our Investor Relations website at investor.apacorp.com. Please note that we may discuss certain non-GAAP financial measures. A reconciliation of the differences between these measures and the most directly comparable GAAP financial measures can be found in the supplemental information provided on our website. Consistent with previous reporting practices, adjusted production numbers cited in today's call are adjusted to exclude non-controlling interest in Egypt and Egypt tax barrels. I'd like to remind everyone that today's discussion will contain forward-looking estimates and assumptions based on our current views and reasonable expectations. However, a number of factors could cause actual results to differ materially from what we discussed on today's call. A full disclaimer is located with the supplemental information on our website. And with that, I will turn the call over to John. Good morning, and thank you for joining

us. Today, I will review our first quarter 2026 results, highlight our execution against APA's strategic priorities, and share our outlook for the remainder of the year. I want to first acknowledge the ongoing events in the Middle East. The escalation in geopolitical tensions and the human impact of the conflict are deeply concerning. Our thoughts are with those affected. Our teams in Egypt continue to operate safely and without disruption. We remain in close coordination with our partners and government stakeholders. We have a long track record of operating in the country, and our priority remains the safety of our people and the reliability of our operations. The increased volatility in global energy markets reinforces the importance of a sound, long-term strategy. At APA, our strategy is very clear. We will deliver top-tier operational performance across our assets, we will build and grow a high-quality portfolio, and we will maintain financial discipline. These principles have guided our strategic direction and capital allocation priorities over the last several years and continue to shape our path forward. Our operational focus has never been stronger. In the Permian, we've significantly improved capital efficiency while delivering resilient oil production volumes, all with fewer rigs and lower capital intensity. Our improving execution is driving cost leadership across key operational categories with great momentum and clear visibility to further progress ahead. In Egypt, we've strengthened base production reliability through targeted water flood investments, a more efficient workover program, and increased uptime, all of which have helped moderate effective base decline rates. At the same time, we're expanding our gas development activity to build a more durable total production foundation. Across the broader portfolio, we've continued to high-grade our key assets and build long-term optionality. First, in the Permian, we've repositioned the asset base to be entirely unconventional, establishing more than a decade of economic inventory with meaningful upside. Second, in Egypt, we've enhanced the value of our assets through improved fiscal terms and a more gas-weighted activity mix. Third, in Suriname, we're advancing a world-class development toward First Oil. And finally, we're building future growth opportunities through exploration. With respect to financial discipline, we've streamlined our corporate overhead to drive sustainable structural efficiencies. This lower cost base, combined with disciplined capital allocation across our high-graded portfolio, supports more steady free cash flow generation through commodity cycles. Alongside our highly profitable gas trading business, this positions us to deliver meaningful shareholder returns while accelerating progress towards the $3 billion net debt target we set just nine months ago. Together, these actions demonstrate consistent execution of our strategy, which is to drive strong operational performance, position the portfolio to deliver long-term value, and maintain balance sheet strength. Turning to the specifics of our first quarter performance, I'd like to highlight several notable achievements. Across the portfolio, our teams executed exceptionally well and delivered capital spend and operating costs below guidance. despite inflationary pressures. In the Permian, operational efficiencies and improved uptime drove oil production above guidance, while gas volumes were curtailed due to weak Waha pricing. In Egypt, continued success in the gas program, including on our newly acquired acreage, is underpinning the delivery of our ambitious 2026 targets. Longer term, we remain excited about the extensive prospectivity of the Western Desert. Robust asset performance, complemented by favorable commodity prices, generated nearly half a billion dollars in free cash flow during the quarter. Ben will discuss the steps we're taking to further strengthen our balance sheet in the current price environment. Looking ahead, we are carrying significant operational momentum into the balance of the In the U.S., we are raising our four-year oil production outlook to 122,000 barrels per day, reflecting our confidence in continued strong performance. In Egypt, despite gross production volumes above previous expectations, our adjusted volume guidance has been lowered to reflect the PSC impacts of higher commodity prices. We remain focused on capital discipline and cost management, with no change to our upstream capital or LOE guidance. In closing, our first quarter results reflect continued execution across our Permian and Egypt assets. In the current higher commodity price environment, we are prioritizing free cash flow generation over incremental activity and maintaining a sustained focus on cost reductions to drive long-term value. We remain rigorous in our capital allocation across our foundational assets in the Permian and Egypt, which are poised to deliver consistent production volumes for the next several years, providing a stable and durable base for free cash flow generation. Organic, high-margin oil production growth is expected to come from Suriname Grand Morgue, which remains on track for 2028 First Oil. This is a clear differentiator relative to our peers, representing a significant free cash flow growth engine for the long term. We remain committed to our capital returns framework with a clear path to further debt reduction and share repurchases, supported by our current free cash flow outlook. I will now turn the call over to Ben.

Thank you, John. For the first quarter, under generally accepted accounting principles, APA reported consolidated net income of $446 million, or $1.26 per diluted common share. Consistent with prior periods, these results include items that are outside of core earnings. The most significant after-tax item impacting adjusted earnings was $37 million of unrealized derivative instrument losses. Excluding this and other small items, adjusted net income for the first quarter was $489 million, or $1.38 per diluted share. APA generated $477 million of free cash flow in the first quarter, of which $88 million was returned to shareholders. John already covered key elements of our outlook for the rest of the year, so I'll focus on a few additional items. For the second quarter, our outlook for U.S. BOEs assumes continued natural gas curtailments through the end of the second quarter, driven by the current forward strip for Waha gas pricing. No price-related curtailments are assumed in our U.S. BOE production guidance for the second half of the year. For Egypt-adjusted total production, about two-thirds of the second quarter decline from the first quarter is related to higher Brent prices. As a reminder, while higher prices increase profitability, they reduce adjusted volumes under the PSC cost-recovery mechanism, an accounting impact rather than a change in underlying gross production volumes. The remainder reflects the successful recovery of backlog costs from our 2021 PSC modernization, which was completed in the first quarter. As John mentioned, our full-year upstream capital guidance remains unchanged at $2.1 billion. We expect to incur approximately 55% of this spending in the first half of the year, largely driven by the cadence of activity in the U.S. We anticipate most of our Permian turn-in lines to occur in the second and third quarters, sustaining oil production volumes through the second half of the year. We've also updated our guidance for current taxes to reflect higher pricing assumptions relative to our prior outlook. We now expect 2026 U.S. and U.K. current tax expense to be approximately $230 million, nearly all of which is in the U.K., where we are subject to a 78% effective tax rate. Looking at our oil and gas trading portfolio, based on current strip pricing, we expect these activities to generate approximately $1.1 billion of pre-tax cash flow in 2026. This is inclusive of commodity hedges and reflects significantly wider Waha basis and higher LNG prices since our last update. Turning now to the balance sheet, we ended the first quarter with approximately $4.1 billion in net debt, compared to $4 billion at the end of 2025. This slight increase is attributable to a large use of working capital, almost all of which was driven by two factors. First, an increase in total company receivables due to the significant rise in oil prices late in the quarter. Second, the payout of incentive compensation accrued throughout 2025, consistent with our usual practice. As outlined on page 8 of our supplement, we've repaid $634 million of near-term bond maturities year-to-date, including $555 million in April. Combined with the deleveraging steps taken in 2025, this results in interest savings of more than $60 million versus last year. Compared to 2024, we now expect annual interest expense to be approximately $150 million lower on a run rate basis at the end of 2026. With no debt maturities until December of 2029, we have significant financial flexibility to manage our decommissioning liabilities in a deliberate and efficient manner while maintaining our broader capital allocation priorities. priorities. Moving now to our cost reduction initiatives, where we're continuing to make progress across capital, LOE, and G&A. We remain on track to achieve our $450 million target for cumulative run rate savings by the end of 2026, which is reflected in our current guidance. Building on the significant strides made last year on capital and operational efficiencies, our focus this year will span all three categories, with the same discipline and focus that enabled the results we delivered in 2025. Including the previously noted interest savings, we expect run rate cash costs to be $600 million lower exiting this year compared to 2024. While commodity prices have been volatile since the start of the conflict, the strength of our execution and contributions from our gas trading portfolio position us to generate significant free cash flow this year. Currently, as outlined on slide nine of our supplement, we expect to generate approximately $2.2 billion of free cash flow for the full year. This level of cash generation meaningfully advances our progress toward achieving our $3 billion net debt target in the near term while supporting shareholder returns. In closing, these results mark another quarter of consistent, predictable performance across our asset base, underscoring the disciplined execution we've demonstrated for more than a year. We remain well-positioned to deliver significant free cash flow this year and beyond, supported by continued execution and structural cost improvements. We will continue to allocate capital with rigor, balancing shareholder returns, balance sheet strength, and investments in future growth through exploration. With that, I will turn the call over to the operator for Q&A.

Thank you. As a reminder to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. We ask that you please limit yourself to one question and one follow-up. One moment while we compile our Q&A roster. Our first question will come from the line of Doug Leggett with Wolf Research. Your line is open. Please go ahead.

Well, thanks. Good morning, guys. I guess, Ben, maybe for you first, the big gas trading number is pretty meaningful. I think if I go back, maybe, I don't know, about six or nine months ago, you talked about a $300 million kind of run rate. But now we've got Hugh Brinson and a bunch of things going on in Midland coming online. With what you know today, given what's happened with TTF, what would you say your line of sight is? What does it look like beyond 2026, and what tools do you have to maybe protect some of that? That's my first question. My second question, if I may, is, John, it's probably for you, but just a quick one on Alaska exploration. My understanding is you've been waiting on the seismic. My understanding is you've now got the seismic. I'm just wondering what that informs for your views on the existing discoveries and what your running room is for the upcoming drilling program.

Sure. Thanks, Doug. So when you look at the marketing book, the $1.1 billion this year, a lot of that is coming from the pipeline transport side. About $300 million is coming from LNG for the year, for the remainder of the year. And the bulk of the pipeline transport really is kind of through the summer where we see very wide basis differentials. To your point, that starts to compress, at least per the curve, given GCX expansion, the Blackcomb pipeline, and Hugh Brinson coming online, kind of all in the second half of the year. So, you know, we watch that and we'll see how the basis trades, you know, given the different dynamics with gas production in the basin, you know, higher GORs, a lot deeper targets being drilled with more gas cut than other wells. And so we monitor that. Basis does, at least per the curve, continue to tighten into 27. But the good thing is that, you know, with the elevated LNG prices this year, that does carry through into next year. And, you know, a current strip, we're just above $400 million of expected pre-tax cash flow in 2027 at strip for both Basis and TTF. So still another good year expected next year. We'll monitor that. We have hedges on just the basis for this year. We do look at other options to hedge 2027, both on the LNG and the basis side. We've not done any of that, but we monitor that daily. And if we find the right opportunity, we'll look to lock some of that in. But even next year, at around $400 million, it's still looking to be another good

year for us. And Doug, on the Alaska question, yes, we took this winter off to reprocess the seismic. And if you go back, when we drilled sockeye, we said we went to sockeye, not because it was our biggest prospect, because it's where we had the best seismic picture. Taking the results from sockeye and King Street and integrating those into the new reprocessed seismic was really, really the right thing to do we us and our partners are all thrilled that we took that pause it now looks like we did not drill sockeye even in the thickest place and we will be coming back you know this winter with a two-well program we're in the process of assuming operations but you'll see us come back with an exploration well and an appraisal well and we're very very excited

about Alaska. Great stuff. Thanks, John. Thank you. And one moment for our next question. Our next question will come from the line of John Freeman with Raymond James. Your line is open.

Please go ahead. Yeah, good morning. Hi, guys. The first question, obviously, it's nice to see y'all be able to take advantage of the macro backdrop and retire all those near-term maturities and obviously buybacks sort of took a pause. When I sort of think about like the rest of the year, should we assume given that the next maturity is not until the 2029 and those aren't callable yet, should we just assume the majority of the free cash flow goes toward buybacks? I know Ben mentioned maybe the decommissioning obligations. I wasn't sure if that meant that maybe some of those get accelerated, just any color on, obviously it's a high class problem, but just uses of the free cash flow.

No, John, it's a great question and a good observation. I'd start out and say we're living in unprecedented times. We remain committed to our 60% returns framework that we initially outlined in the fourth quarter of 2021. Since the inception of that framework, we've actually returned 71% of our free cash flow to shareholders. and there have been times when we leaned in on the equity side and times when we leaned in on the balance sheet side. We also, nine months ago, outlined a net debt target of $3 billion and that's something that's also a priority for us. The beauty of today is we've got commodity exposure to both WTI, rent pricing, uh, LNG and the basis in Waha. So, uh, you know, it puts us in a position where, you know, rolling forward, we do have a very robust free cashflow, uh, you know, outlook for the remainder of the year. Um, the thing I would say, John is, uh, while we've made progress on the balance sheet, we're going to continue to be very, very thoughtful about, uh, how we deploy that. Um, you know, we like where the, uh, you know, where the, uh, the valuation is, but we also want to be thoughtful. Anything you want to add to that, Ben? Sure. I think, you know, to just reiterate,

given the current price environment, you know, and the opportunity we have to improve the balance sheet, and we took some of those steps through April, you know, we think the responsible thing to do is just evaluate how we deploy our free cash flow for the remainder of the year. We are committed to our framework, as John said, and really starting from fourth quarter of 21, when we put the framework in place, cumulatively through the year-end 25, we've returned more than 75% to shareholders through dividend and buybacks, and $3.2 billion of that was in buybacks. Also, on the debt side, since year-end 21, we've reduced debt by $3.6 billion. So being only two months into the conflict, and we've seen immense volatility, not just the past couple days, but really over the past two months, we're going to be patient, recognize that really the responsible thing to do is evaluate how we deploy the significant amount of free cash flow that we expect to generate this year. To John's point, and to be clear, this is not a view on our valuation of our equity. It's just solely how we would deploy the free cash flow for the remainder of the year, we will pay down debt, we'll pay our dividend, and we'll buy back shares. It's really the mix is what we're evaluating. At these prices, that's the right thing to do. I'd just end with

it's a great position to be in where we've got an increasing free cash flow picture, and we're

going to be thoughtful on how to deploy it. Just one other thing. John, you mentioned that with all the free cash flow. Maybe we'd want to look at the decommissioning activity. I do want to point out we raised guidance on decommissioning spend this year by $20 million. And I want to be really clear, that's not an increase in costs of planned activity. That's actually all increase in planned activity. There are some more platform wells in the Gulf of America that we just want to go ahead

and get after. And we'll do that this year. I appreciate all that color. And then I'm just going to shift to Egypt. Obviously, that resource base gives you a lot of flexibility between gas and oil. And I think the current program is close to 50 percent of the activity is kind of gas focused. And I appreciate the fact that, you know, you'll get like a 425 gas price, which is obviously quite attractive, but is there a certain level in that kind of where the oil price is relative to that gas price you're getting that would potentially cause you all to think about any sort of a shift in the allocation of activity in Egypt, whether it's, you know, currently or,

you know, next year? Yeah, John, I'd say, you know, first of all, when you look at where we geared and negotiated the increased gas price. We geared it towards a $75 to $80 Brent price, inclusive of infrastructure investment. And we've been fortunate that we've been able to get a lot of our new gas discoveries on without a lot of infrastructure spend. There have been some lines that we've laid and some things there. So we're in a position today where it still is very, very attractive. I think also with the new acreage that we brought on last year, we've got new wells to drill that we want to drill there. So you're going to continue to see right now the program's about 50-50. They need gas. If you look at what we're providing for them right now, they're saving about two LNG cargos a month on the gas side. So we're in a pretty good place and we want to monitor how things play out over time. Yeah, I would just add to that. As John

said, we are basically splitting rig counts 50-50 between gas and oil. And on a mid-cycle price environment, we are agnostic basically between gas and oil. And no, we're not in a mid-cycle price environment as we speak, but certainly much more volatile than a mid-cycle situation. But we feel like this is the right split at this point in time. And I just remind people that while we're getting an average of $4.25 for gas, the actual marginal price on new gas is higher than that. Thank you, guys. Appreciate it. Thank you. And one moment for

our next question. Our next question is going to come from the line of Chris Baker with Evercore ISI. Your line is open. Please go ahead. Hey, guys. My first question is for John. Good morning.

First question for John, you know, clearly a lot of great progress on the cost-saving front. Some good, you know, first-quarter numbers around LOE and other costs. You mentioned inflationary pressures, I'm presuming in the Permian, but any additional color you can add in terms of what you all are seeing there? It seems like it's still a good quarterly result.

No, I think teams are doing a really, really good job. You know, we came into the year in Permian with higher power costs that we outlined. You know, I think you're seeing, you know, diesels on the rise here, not just here, but also globally as well. But doing a good job. We came into the year with most of our contracts and services under contract. So we're in a pretty good place there. You have seen a little bit on tubulars. Power diesel would be the main items. But I think in general, our teams have been able to do a pretty good job, which is why we didn't raise, you know, the cost on the outlook due to those inflationary pressures.

That's great. And the second question, just maybe for you or Ben, you know, as you guys think about some pretty significant progress towards the $3 billion debt target, Can you just help us think about how that, you know, what that unlocks in terms of strategic priorities or how are you thinking about, you know, the opportunity that that provides you all in terms of, you know, cash returns, buyback dividends, or other sort of longer cycle investments?

Sure. So yeah, last year when we outlined the $3 billion net debt target, recall that we said that at mid-cycle prices, we'd expect to get there in three to four years. If we were below those mid-cycle prices, it may take towards the end of the decade. If we were above, we said it'd take one to two years to get there. So it's in the crosshairs of what we see now of being achievable here in the near term. I think once we achieve that, we'll look at the different priorities that we have. Clearly, we've got a strong debt maturity runway here with no maturities due till really the end of the decade. That allows us a lot of flexibility to prudently manage our ARO and decommissioning. You know, we've got exploration on the horizon, so we will continue to invest in the future. You know, last year and this year, exploration spend was, you know, less than $75 million. This year's guidance is still at the $70 million, and that's just $20 million for ice roads in Alaska and another $50 million for exploration in Suriname. But when you get into $27 million, additional exploration in Suriname and the actual wells being drilled in Alaska, we'll see some more exploration spend, and that number will tick up next year. So we'll balance all of those priorities. If we reach the net debt target in the near term, we'll reevaluate that time and likely set another target below that, but balance all the different things that we've mentioned.

Thank you. And one moment for our next question. Our next question will come from the line of Neil Dingman with William Blair. Your line is open. Please go ahead.

Morning, John. Thanks for the time. My first question is just on Suriname. While I know that first oil production you guys talked about from Grand Magoo Project in Block 58 is scheduled for mid-28, I know you also mentioned there's various other exploration projects either also in Block 58 or 53. Is there anything that you would talk about here in the near term?

Yeah, I think both us and our partner are excited about the additional exploration we have in Block 58. And, Neil, if you remember back when we announced the appraisal wells at Crabdago, I said those not only appraise Crabdago, but they de-risked an entire exploration play from a seismic perspective. So we've got a number of prospects, and the plan is when we get the rigs out there to start drilling some exploration wells that at a minimum could extend plateau or potentially even look for incremental infrastructure. So we are very, very excited about getting back to exploring in Cerna.

Very good. And then second question just on Egypt. Specifically, I'm just wondering, how many, I think you might have said, but how many workover rigs are you currently running in? You know, would you all consider boosting the workover count here similar to what, you know, to take advantage of the higher oil prices, similar to what some of the domestic guys have done with their workover count?

Yeah, I mean, I think when you look at where we are in Egypt, we're in a pretty darn good place. We've been investing in the secondary projects, water flood performance. We've been able to maintain a pretty flat profile for several quarters, so in pretty good shape. So, Steve, anything you want to add?

Yeah, I don't know the exact count of work over rigs today. It's somewhere in the mid to high teens, as it has been for quite some time. It got higher than that for a while because, remember, we use workover rigs for completing new drilling wells as well as for workover activity.

Thanks, John. Thanks, Steve.

Thank you. One moment for our next question. Our next question will come from the line of Kevin MacGrudy with Pickering Energy Partners. Your line is open. Please go ahead.

Hey, good morning. Thanks for taking my question. I just wanted to touch on oil realizations. The international oil realizations were quite good in the first quarter. I realize that we're in a very volatile environment right now, but is there any kind of outlook you can provide for the second quarter and maybe the back half of the year for Egypt-North Sea realizations relative to Brent?

So really on both of our oil commodities, Brent and WTI, the current market is giving a premium for spot prices on that. We do get dated Brent for our North Sea oil as well as our Egypt cargos that we sell. That dated Brent differential to the price that you see on the screen has varied pretty widely in the first quarter, really March, and then in the second quarter, it's kind of $8 to $10 in the second quarter, compresses through the year. So, you know, based on current strip, it's about a $5 to $10 premium for dated Brent versus the futures Brent that you see on the screen. Similar on WTI, there's a couple of factors that go into, you know, getting the four price to a spot price. I won't go through the specific details on that, but when you put those factors together, It's about a $2 to $5 premium on WTI that producers are getting to realize for the barrels that we're selling in Midland as well.

Appreciate the details on that. Very helpful. I'll leave it there. Thanks.

Thank you. And as a reminder, if you would like to ask a question, please press star one one on your telephone. And our next question will come from the line of Leo Mariani with Roth. Your line is open. Please go ahead.

Yeah, I wanted to follow up with you guys on LOE. Certainly it looks like your LOE has kind of come in below guide, you know, the last, you know, couple quarters. Can you just provide some color around, you know, the drivers there? And you mentioned inflationary pressures on the call. Do you see some of that maybe rolling through LOE the rest of the year as well?

So, you know, in the first quarter, The coming in below guidance on LOE was really cost savings in the U.S. There was a little bit of timing in there as well. As we look for the full year and keeping guidance at the 1525 for the full year, we do see inflationary pressures mainly on diesel in Egypt, diesel usage and the higher price for diesel pushing up Egypt LOE. Those are offset from other savings that we're realizing currently and expect to continue to realize through the rest of the year, predominantly in the U.S. And we've talked about the $100 million of spend that we're going to have this year on LOE uptime projects in the Permian. Those are going according to plan. And, you know, when you bake in the savings from that as well as additional work that the field is doing in the U.S. is offsetting any inflationary pressures that we have in Egypt. So full year is unchanged right now.

Okay, appreciate that. I wanted to shift back over to Egypt. I think for, you know, at least about a year or so, you guys have kind of talked about sort of, you know, a modest decline in Egypt's gross oil volumes. Looking at, like, the last several quarters of 2025, you guys actually did not see a decline. The number did kick down a little bit in 1Q on gross oil. Just trying to get a sense, are we still in a position where you think for the rest of the year there's a modest decline on gross Egypt oil, or think you guys have been doing a good job and be able to stabilize that a little more?

Yeah, I think that both of those things are true, actually. But what's going on with gross oil in Egypt is that I do believe, and we've been saying this for a number of years now, that over the long term we are on a slight decline. We've gone now four quarters in a row, if I adjust for the small concession that we exited earlier this year. We did four quarters in a row where we were right around 121,000 barrels a day flat for four quarters. There's a little bit of noise from quarter to quarter, but basically flat at 121. What you're going to see for the next three quarters on gross oil, and I'm not going into 27 yet, so just the remaining quarters of this year, you're going to see something closer to flat around 118,000 barrels of oil a day. So about a 2.5% to 3% decline from the prior four quarters on average. And that's kind of reflective of a slight decline from year to year. And so I think we're on that. It's just that when you look from quarter to quarter, you can have – we're drilling some very nice gas wells, as you know, in Egypt. Well, some of those are rich gas, and they come with condensate, which counts as oil volumes. And so some of the success on the gas side is actually helping with the oil decline rate. But the one other thing I would just note on that is that, you know, we have been talking about a slight decline in oil volumes for about three or four years now in terms of a slight annual decline rate. That was that was we started that back when we were running basically 12 rigs drilling for oil. Today we're running 12 rigs, half of which are drilling for oil prospects, the other for gas. And we're still talking about a slight decline rate year to year. So I think that speaks to the oil that comes with some of the gas volumes, but also just more efficiency on the oil drilling side as well.

That's super helpful. And then just on Egypt oil, obviously that seems more strategic these days, given energy security issues. It doesn't really intersect with the Persian Gulf or the Strait of Hormuz. You know, is that potentially a consideration where you might say, hey, maybe we should do a little bit more in Egypt oil in the coming years, particularly if prices are supportive?

Today we're in a good place with what we're executing on the projects. We've got the new acreage that we're drilling some prospects on. I think some results there, we do have oil and gas prospects there. More of the success of the program could drive what we do there. But right now, they need both commodities, and we're doing what we can on both fronts.

Yeah, I'd just echo that ending comment by John in that he noted earlier that Egypt is importing LNG now. And if you look at it from an energy security perspective for the country of Egypt, they're just as interested in gas as they are in oil because they can import both oil or refined products, which they do.

Thanks, guys. Appreciate it.

Thank you. And I'm showing no further questions at this time. And I would like to hand the conference back over to John Chrisman for closing remarks.

Thank you. In closing, we delivered an excellent first quarter with continued execution across our asset base, driving strong operational and financial performance. In this current price environment, our focus remains on free cash flow generation through disciplined capital allocation and continued cost reductions. We continue to make significant progress toward our $3 billion net debt target and will continue to balance further debt reduction and meaningful capital returns to shareholders through the cycle. Finally, we are well positioned to sustain production volumes across the Permian and Egypt over the next several years, providing a durable foundation for free cash flow generation. Suriname Grand Morgu remains on track for first oil in mid-2028 and is expected to drive meaningful organic oil production and free cash flow growth over the longer term. And with that, I will turn the call back over to the operator. Thank you.

This concludes today's conference call. Thank you for participating, and you may now just connect. Everyone, have a great day.