EPM - Earnings call transcript Q3 2018 | Evolution Petroleum Corporation

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Operator

Thank you for standing by. This is the conference operator. Welcome to the Evolution Petroleum Fiscal Third Quarter Earnings Release Conference Call. [Operator Instructions]. I would now like to turn the conference over to David Joe, Senior Vice President and Chief Financial Officer. sir. ahead, go Please

David Joe

XXXX. thank conference joining and call fiscal Executive March for and Keys, is Evolution and President financial listening Petroleum's its Chief XX, ended quarter earnings to third me you morning, today and Randy for Officer. to results With Good discuss operating

a If by company's the going to today's it replay wish you listen will call, to website. of to be shortly available

time-sensitive information and XX. May not We have provided note any a today statements replay are at recorded accurate Please and may that be until date. a later

release, SEC. contain Our and yesterday's to discussions on These from materially statements an will everyone today going XXXX to fiscal Randy for are filings news on to and beliefs Since Actual assumptions expected. the and plans are XXXX. those fiscal the Keys, to described and statements on will our this available operations risks numbers information. results forward-looking turn overall available may CEO. and are over update of uncertainties am readily that call I key our listed first management's differ currently of call and now detailed subject based half in of results, remainder President forward-looking in focus with the

Randall Keys

Financially, and reported Thank cash you, David. quarter earnings good we flow. a with solid very

a below attractive $X.XX cash, and country. the XX This to got but well program. quarter, Delhi mid-teens. the were infill Our are well million a January total to balance return $XX now of is freezing with And experienced Operationally, our a since of capital, on per and bit no X start that XXXX, and sheet that rough paid the provide cash share. part we the down in which remains now strong of debt. an were with continue days $XX dividends unusual working area we've in The is that drilling million in for way of shareholders. days recovered to nicely off most positive in over we We've to

Now weather, of the field failures down is days our January. able normally series shut combined a the handle to freezing equipment in small field for in to several but

season, through other hear will the weather-related among first for impacts production we you start, over in quarter Despite our the earnings the go $XX I revenues on suspect As quarter. of we reported million slow peers.

revenues, in was we WTI to per just $XX $XX crude sales program from prices While steady of comes began we've are With a progress field, time and barrel. field the big per seen seeing WTI markets. over the since we prices the show in oil November pricing first the March under Delhi of the in downturn the news have for in This The LLS that in price the now for recent XXXX well. above oil increases these at The barrel, of drilling levels. the our infill been generating continue XX% is average is Evolution going company. quarter boon but XX-well Delhi

out and timing have is end wells wells of online them to been so several from expect and a wells of completed X the drilled The X May. has to operator new production the bit we have We building the of by the The these response wells, far. connect infrastructure of uncertain.

there case injection we June production delayed won't shorter additional in see response before a injection X in a wells, impact the typically the wells developed see we the these from quarter. and production. field the part began are COX our of heart is pressure. But of As of are the under significant in since already may a probably This in response lag we be planned COX

gains quarter. from spent current spending for in about $X.X further new some see expected infill year so been We We this the to fiscal far will our expect there. in million -- quarter of has wells only the quarter in Capital $XXX,XXX and previous production budget September modest. the the

see based ended up the Joe quarter on turn in to we're over June I'm to making call going with results ramp progress spending expect XX. the financial for the program. now of recap the back the infill We a for to David drilling quarter our March

David Joe

be the key comments couple our financial Randy. key will Thanks, to a both and of quarter quarter. compared prior items year-ago a My in -- quarter limited to

be Additional XX-Q. our details today file available we will when later

the In mentioned and long free earlier, the Randy we financial the buildup all the working consistent continues results of As company continued the with of in continued shape. trend quarter financial positive flow great be to capital, distributing cash stock a paying working In million million dividend. current common quarterly of while the $X we $XX.X with prior of dividends. cash capital, almost after quarter, $X.X in an ended from increase million quarter, the

We in generated per for earnings net $X.XX prior $XX.X $X.X operating quarter. if or cash per $X.XX uptick $XX.X quarter limiting in by makes the share compares net $X.X were in were or combined earlier, to $X you in working of million In the million net revenues caused G&A the quarter. share the impact in tax $XX weather Our in and Adjusted of income costs, Clearly, balance million is year-ago Oil $X.XX mentioned share. field quarter, compared factors quarter. the key share. expense, and of prior the income balance. production $X.X year-ago NGL up $X.X million the the per event income the an with million lost million the noncash to million of capital or onetime million exclude $X.XX. reform, per XX% This in is

purchased the and of to revenues. both to to intends higher oil in increased due for investments. attributable the our directly in million Delhi oil and prices which and and account The As oil are trend, quarter, its are planned revenues. operator Delhi Randy fourth fiscal continue field. into prior full we COX field outlook and this with remained on very XX% to Despite quarter, Production both strength attractive, record costs realized quarter $X.X margins total mentioned, COX higher of revenues and track excess Evolution report cost, for prices year the and our about the year-ago development is continuing to field increased compared at momentum both primarily volumes

nonrecurring dating from total This legacy Our final noncash respectively. G&A XXXX. $X.X million million, an expenses expense, settlement primarily inclusive of to $X.X $X.X compared prior of due and G&A, of legal the year-ago increase back litigation matter a in million quarter was quarter, and in to -- legal was the

of shareholders a $X.XX week company share declared Board as to June Lastly, this cash cash Directors return continues have to the back for quarter. the per dividend the the XX

when more we we liquidity, market take $XX warrant. current flows, of and into the combined that, As questions. a credit with remains place a facility fiscal have In be expected on of excellent We will outstanding anticipated at With our and million to are and anticipated XXXX. fiscal XXXX than half reminder, cash also in dividends needs sufficient any which believe capital ready the Delhi be borrowings the operating company's financial to program, for company no operator, first will fund with remains that the our buyback conditions debt-free. in condition positive capital, share closing, working utilized remainder

Operator

[Operator Instructions].

The from Capital. comes White first question John Roth of

John White

provide but increased or can volumes? you some color -- covered provide it, You may did the on COX already you have some

Randall Keys

quarter, a of the in recent for to that -- the I the most gave find were current the we We quarter, that in million. XX.X to release, and it sequential million day XX.X schedules, now. on Yes. press million and I'm this the compares and of detail XX.X one right struggling believe basis a March

a purchased the that the COX So we're bigger oil is little price for X bit, or million The a directly up tied more. has impact price. our about been fact day to

we've for up, price -- the So cost higher a is that. seen seen as we've going

bit price, from the we As that in give do COX higher of little costs we benefited back basically. a oil of form the higher

John White

you And for your down, COX? when goes -- the Right. benefit goes LOE crude down

Randall Keys

Correct.

a the downturn. did price, difference a to So and hedge us crude natural small on the it it's during make big

John White

with continue these volumes? Do COX you think injections

Randall Keys

see fact, increase. And we'll temporary will. in a They probably

already I've we As because, as It's field COX -- the over tank for don't said pressure. is amount going basically not increase areas. a field we'll -- I some fill return to some to normal earlier, COX it's expect we new up under need add levels. back to But to with the wells, see buy months, field do taper be of and the area think start those new off these and huge -- the that we'll few the pressure that to to additional next infill to

John White

Okay.

fourth of And first so calendar experienced part increase quarter latter over would third -- calendar and calendar part the quarter? of be

Randall Keys

That's exactly right.

we the of end early but the May, injections We'll then, broadly may to small wide the as some in defined, May, time late year, increase now -- between got see they're start that, time the current and so throughout but uncertainty. some some as we'll see subject year. balance of We've Some And some of the estimates that. fairly of quarter, June quarter. the

to say just this we're an in kind we going program. So COX, we know invest that's of have implicit to of and cost

Operator

Brown [Operator Management. Capital of from comes Brown next Instructions]. question Bruce The

Bruce Brown

do WTI? well -- now going $XX with believe might you production. questions. rising how by I Are nicely have to at deferred the any your quarter? considering much now point hedging of seems two secondly, of some And first weather having of Everything the production have with right not out with you on quick be been prices hedged cold north

Randall Keys

robust every meeting first more we Okay. question, To your have occasionally, at and that quarterly that. of board often than discussion a

bullish this on any and commitments. not financial have We We collectively prices major don't have any as a continue -- on at and hedges fairly be to to decided put time. board

We have no debt.

modest. is spending capital Our

-- of the with like there. trying protect basically, we've all got and at are cushion or the dividends, with we plenty point just -- to hedge So is that we doing hedging feel

under payout dividend at Our current ratio levels. is XX%

feel risk don't we a or compelling there. need So

benefits we from call think shareholders rather our as it than it that retain look sell basically think -- us upside to that I at away have them. So I

or think, I time in have need a us. remain a as going is different change puts view so on -- we we until puts And requirement such circumstances for try on we're our financially to our to lightly different a that unhedged --

Bruce Brown

production deferral cold what the the due to And about weather? of

Randall Keys

basis, in which about estimate it's very -- year-over-year yes, really as Well, as hard we big our is just not a much field. XX% this much production. We on gross It picture were the XX,XXX that. on with could barrels to down be

as on we'll just it that I now, a event onetime tracks and we was pretty temporary at that. much back experienced So with -- look we're normal it our

Operator

I'll remarks. closing Joe any Instructions]. call back over at no for are now David hand the time. questions more [Operator this There to

David Joe

for may again have. contact you participation a and day. your Thank you today, questions any Have with good us

Operator

call. This conference concludes today's

have and participating, pleasant for you day. Thank lines. a your disconnect may You

Evolution Petroleum (EPM) 9 May 182018 Q3 Earnings call transcript