Industrias Peñoles, S.A.B. de C.V.

Thank you, operator, and good morning, everyone. In this morning's call, our President and CEO, Matt Gallagher, will provide a short set of prepared remarks.

As we noted in our press release yesterday, we will not be hosting a Q&A session on the call today. Our remarks may contain forward-looking statements, so please see our earnings release for a discussion of these statements and associated risks, including the fact that actual results may differ materially from our expectations.

We also make reference to non-GAAP measures, so please see the reconciliations in the earnings release. And now, I'll turn the call over to Matt.

Thanks, Kyle. Good morning all, and thank you for joining us for our abbreviated third quarter conference call.

Now I'll turn to operations. Overall, our team delivered another solid performance in the third quarter, as steady execution has become par for the course.

After reactivating development activity with 2 rigs and 2 frac crews in July, we delivered steady improvements in drilling and completion efficiency within each basin. Notably, in the Delaware Basin, we drilled our first 2 3-mile lateral wells in under 29 days each, which helped drive a new company record for Delaware drilling efficiency in 3Q '20.

Our team attributes these recent drilling efficiency gains to enhancements made to our remote operational command center during the activity shutdown in May and June. As operational efficiency gains take hold, Parsley is delivering leading edge well costs below $850 per foot in the Delaware Basin.

And remember, our numbers also include facility expense. This efficient reactivation of modern development activity translated to third quarter CapEx of just $85 million.

Oil reduction for the quarter averaged 111,000 barrels of oil per day, just above the midpoint of our third quarter guidance range, helping to drive positive quarterly free cash flow. Operational cost control was another highlight for this quarter.

We have reduced corporate operating cost on a unit basis by 33% year-over-year, with some line items reducing on an absolute basis despite a larger operated well count in larger production base. This is the intentional result of a focused effort of all team members who have tackled integration with urgency.

We plan to do our part in the next phase as well. In line with our prior commentary, Parsley deployed 2 additional rigs in late October, bringing the current number of active operated rigs to 4.

The company expects to continue operating 4 rigs and 1 to 2 frac spreads for the remainder of 2020. To wrap things up, in challenging macro conditions, the Parsley team blazed the trail through uncertain times, consistently delivered on our action plan and positioned the company to endure with relevance.

The combination of Parsley and Pioneer creates an organization that will drive as we forge a new strong link at the low end of the global cost and emissions curve. With neighboring acreage positions located entirely in the low-cost, high-margin Permian Basin, the industrial logic of this transaction is sound.

Furthermore, the Pioneer team shares our belief that a clear returns-focused mindset is the best tool to compete for capital with the broader market. Sustainable free cash flow and growing return of capital are now the investment prerequisites for the energy sector, and this combination strengthens those paths for our shareholders.

Additionally, I have the utmost confidence the combined organization will maintain the leadership role in advancing environmental sustainability efforts for our industry. We look forward to finishing strong with a seamless integration in partnering with Pioneer team as it cements its position as the premier independent E&P.

Finally, I would like to personally thank every employee and alumni of Parsley Energy for their role in the evolution of this company. From operating a few dozen vertical wells in 2008 to a global leadership position in E&P and operations to date, great job to the Parsley team.

And thank you all.