Episode 2: Doug Lawler – The Private Company Advantage

Maybe I can kick off with a question then, uh, Lloyd and John, I'm sure will chip in and follow on.

I mean, the current market environment clearly unique, right? What we're seeing right now in Iran, and the big discussion amongst capital providers and investors has been, does this m- does the industry react, right? For years, the industry would have reacted quickly.

Capital discipline would have been thrown out the window.

Everyone would have put rigs to work immediately.

It was all about growth at any cost.

That, that, that dynamic's obviously changed.

As you sit there with private money, how do you think about, you know, what would cause you to change plans? What would, you know, cause you to ramp up significantly? What's, what's the internal economics that are being discussed in the internal capital planning at Continental?

Continental?Yeah, it's a great question and, and one that because of being a private company, uh, we, we have so much more flexibility and don't have that, uh, public, uh, facing, uh, three, six, 12-month, uh, reporting structure that we're being measured by, by that yardstick that, uh, the public companies have to deal with so often.

Uh, it gives us that flexibility to say, "Hey, if we can generate and, uh, increase the value of the company and, and further, uh, uh, grow the value," uh, that's exactly what we're going to do.

When we entered the year, uh, we, we had reduced our budget, uh, from prior levels in 2025 just because of anticipation of prices being lower.

Uh, we, uh, got into the March period and, and when all the conflict broke out, the war saw an opportunity and said, "Okay, well, we can actually mobilize some more capital." Uh, mobilizing that capital could, uh, significantly, uh, create some additional value in the near term.

We increased our budget by about 15%, uh, uh, at, at that time and, uh, picked up a few extra rigs and then, uh, in addition to that, here just recently have, have, uh, have made the decision to generate the-- or to increase that capital a little bit further, generating really strong returns.

And part of the rationale that we're looking at today, Ben, is that when you think of, uh, uh, the company's inventory, the resources available to us, the 10-year trajectory of, uh, of how we intend to develop those resources, we have a, uh, um, a plan that, uh, goes out five years with, with certain different pricing sensitivities.

And basically, when you look at those pricing sensitivities, you say, "Well, if, if we can mobilize some of those resources today and generate more value, uh, the company will be stronger for that." And so, as such, have, uh, increased our capital budget yet again.

So we're, uh, uh, we're responding to it.

It being private gives us, uh, a, a considerable amount of flexibility, um, and, and really just optionality to create value and focus on the right things.

And so, you know, when you're not taking on debt, you're not taking on, uh, any-- you're not de-decreasing or depleting your inventory that's gonna affect the long-term value of the enterprise, it says mobilize that capital and capture the value.