EPM - Earnings call transcript Q2 2019 | Evolution Petroleum Corporation

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Operator

Good day, ladies and gentlemen, and welcome to your Evolution Petroleum Second Quarter Fiscal 2019 Earnings Release Conference Call. [Operator Instructions] At this time, it is my pleasure to turn the floor over to your host, David Joe, Chief Financial Officer. Sir, the floor is yours.

David Joe

Thank you, Karen. Good morning and welcome to Evolution Petroleum's earnings call for our fiscal 2019 second quarter ended December 31, 2018.

and for operating quarter. discuss will financial the results We CEO; me CFO, call of I Senior Interim Business Joe, Engineering joining President the Steve on of Vice and Chairman am David Development. Herlin, and the and Hicks, Bob today Board and is

be information website X, wish will and or any today recorded until listen March via Please sensitive not call, to going note and statements by you a be a replay a shortly If today's are time accurate to XXXX. that of later provided to it available the company's may date. replay at

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

Robert Herlin

$X the We the revenues, million Thanks, increase our fund earnings quarterly million quarter and over CapEx capital again payout $XX $XX XXXX performance. earnings year. and by at $X strong had of for Evolution million, we are We flow really on David, our call. fiscal almost million ratio. million able start to from cash in of has this to welcome had everybody operations of dividends and of of compared quarter working Once to Delhi $X second our fiscal nice posted a

on shareholders. borrowing the almost base. we no drawn million debt capital, now for have pretty fiscally well elected $XX our $XX of So working We with did million

beginning already well could increase our to We're with further really on to working our cash production. XXXX operator value Field with that program asset well, and performing is projects Delhi the of contribute flows Our infill meaningfully new there. assets some

periods. expansion any elected begin We fiscal have recent the phase expect Delhi board debt don't XXXX of sometime not our outstanding, Since period. at utilize shareholders. at hedges light will we has to during future a to on next project our oil Consequently, current performance real tied NYMEX, be a losing and to which premium currently that to to is our sells nice benefit the price sweet

our are what needs strategy a basis time, the that what are review at what we on expectations our quarterly and prices Now we financial and consider are.

Looking The continuing policy. compatible forward, a evaluate and and opportunities our oil CEO process is also acquire support this expecting and I'm be should of our numerous that that we gas this completed to related continue selecting meet properties new to specific criteria spring. developed dividend

Now, discussion for to details. over with operating I'm that going David? David back some to turn this more

David Joe

Thanks Bob.

Sweet oil financial production results. combined despite our Light to our As mentioned second X% and continued the we pricing financial excellent in at oil another growth in quarter. NGL factors prices strength reported key premium for quarter, in The much quarter of fiscal Delhi with Bob lower were these second yet Louisiana fiscal

least online to expected Delhi as February Looking and from infill through production NGL forward operator are premium plant that improve positive and rates. come the appears LLS at it improved remains the stable efficiencies the at XXXX expects more of wells

the December quarter increased XX, For quarter. compared X% volumes prior the production total ended, XXXX to

commence the the our $XX quarterly quarter. are program on from third from infill higher from production production Thus commenced quarter. prices December's Realized expected is that. decrease remaining a X% wells quarter, in current were prior a January's the our bit were price WTI days prior XX% far, in the production six NGL second quarter. wells WTI per well drilling oil to a prices than than first higher As decrease average Realized average February had second is quarter. anticipated, and XX% oil fiscal in BOE, price from $XX.XX contributions fiscal One in the January two in six our fiscal and

Purchased a were trend we was million operating cubic makes XX% Total of the feet So, or quarter-over-quarter up more cost, or $X.X to all and day. this COX hope our essentially month, quarter-over-quarter continues the at which cost quarter throughout the XX% year. COX portion million. volumes XX per up flat significant

day March about XXst. per current We as expect XX additional to these increase commence to cubic wells in million purchased injector feet the injection ending COX volumes quarter

previously oil helped thereby offset which flat down expenses and increased COX in XX% were maintain volumes prices mentioned, As the COX quarter-over-quarter. overall quarter,

Our other $X expenses flat were operating in field lease quarter-over-quarter the at million.

Delhi the excess continues in margins lifting Our for the per to BOE. BOE, XX% operating per $XX.XX BOE, from field quarter per which prior impressive per total $XX, $XX.XX at BOE. generate of X% BOE is cost revenues quarter of was With a revenues per $XX.XX an $XX decrease of -

the - costs the of of our $X.X will part plans majority water has well in $X margins for remained modest million, proposed operator the in calendar be however, up current our The to phase conformance development over to to of million for operating our work expected any XXXX, net source spend next for a future. field changer development in months or year the the company quarter which in now has field. commodity flow which The for and not it's game it's for is six increase completing capital a Evolution the large cash historical our to well operating It's injection relatively worth of some and the expected directly preparation In field. year remainder our the a water that the continue capital Delhi for for at generate free is yet foreseeable fixed at the Delhi a expenditure fiscal not for increase and to shareholders and long-lived Evolution. a Delhi projects. about next of resemble CapEx high-quality, majority With the been to the for estimated reiterating for price in asset, was anticipated while she rates

over $XX We X% million a on per $X.XX manage expenses and shareholders reporting Current or is inception now yesterday's about robust years shareholders to out G&A to closing annum, The about million ago. the paid committed X.X% rate our since yield, of to cash program's ended quarter December. for $X.XX returning $X.XX to price. per continue decrease prudently, a remains in to dividends share company the has dividend five based

remains working capital million of all $XX strong was with of quarter-end, at and which building position Our very liquidity substantially cash.

revenues now of development to $XX future We $X.XX of facility and to continue results development amount and reserve-based call for Delhi elected credit would continue $X.X our a dividend quarterly for In closing declared I out the remarks. in million, This reported Delhi or into to of our to reinvestment per our pay financial fund Bob net strong of have dividend the summary, the million over earnings fund concludes an Field. program $XX to million like opportunities. next back to fiscal we turn review remains set quarter. well-positioned pursue and of income some growth Evolution share, undrawn dividend and new of

Robert Herlin

everyone one to make understands. to wanted just We I David. want thing. sure clarify Thanks

January oil December declined quarter, than far for so during prices oil are is the than While prices the December, price higher substantially less little average the a quarter. our

want clear. make that Just to real

while additional those think are ready And line. year, specific criteria acquire risk-return very location, is opportunities on ratio, mostly long-life, cash is opportunities, disciplined credit that we're as going really we've and to producing to leverage. only Operator, do and line, positioned the pursue actively and the and supporting pursue we With and dividend. seeking to take are over very to are provide our questions. or last won't we our Now, please take risk diversity, discussed This Evolution and uniquely fit fit calls reserves, of we a we growing that I regular in open appropriate undue that resource to past developed excessive untapped basis. effort going that, with our

Operator

first your [Operator state question comes Jeff from Please from Capital. Instructions] Northland our question. And Grampp

Jeff Grampp

working and far maybe about some Is more levels as or of expectations - are quarters recovery get guess, clarity, just or a some of, of pricing couple efforts more you're through for issues release both both all the pricing the guys you're making NGL the about equation. sounds of on little the hoping and in talked reliability, plant I I I side, to side NGLs. the you some guys there it production next more as was production bit talk the little detail like there you guess, NGL and on kind that? a - it Can bit

Robert Herlin

to plant and things work existing Jeff. working reliability we Sure, to have the been two on. continue is, One the improve There's that really downtime. production and of reduce and improve

I think that. and had already benefits so real we've success of we're some good the seeing far

I think be appears production higher. to steadily

something the our or time. that spans on is whether that we'd Now, not improve out uptime

how more I we're kind on go any really opportunities not appropriate On at the operator still since in We're time on to our it's second substantial, situation. to don't a that's we position NGLs. good Denbury is the fluid on this which make But that. grade talk front a some with little working think in of really high what about to detail

go to on into that sorry. not more I detail So, prefer

Jeff Grampp

talked No, day, up talked drilling you completed? properly, injections starts that, details think And to going wanted Phase to of, about up. you in you to the rates nonetheless. that heard I quarters, million guys expansion sure just of past I understand. kind the the appreciate expecting increased think in want I make I for injection infill my once a V of, about to And I have the kind comments just ramping near-term. I clarify is some related see I the program XX follow-up, to COX guys

guess, wanted and So, of also exclusive million XX occur I up ramp-up that gets V is, a Phase might any that to just running? when clarify day

Robert Herlin

the which tied the would are have injection obviously, then field increase in you more gas. that to the added and injection program additional need correct that injections think to is we mean wells to I would that infill of

for purchase So, COX some higher, see for then also to the we'll time, amounts. be have we we little And the of next level life that in of in inject purchase higher that not our field certainly field, increased general, gas of And of a few expect but COX. in period we is. rate all the produced purchase years, the that's

Jeff Grampp

great. Okay,

Robert Herlin

wells, have obviously we're this nice to And which the it's pleased improvement point production-related going seeing. been seen in but we're course, at because we infill production very We've doing results. to with increase still that's oil of a it very early, the

Operator

question. from our next comes Alliance Global. Joel Please your question from And Musante state

Joel Musante

going was on quarter the you ask sure just can I - lower if the why to a had to a Jeff? about comments just I'm given not - opposed I why Yes, talk price NGLs. this to your And previous question were there as was

David Joe

Yes, the is NGLs simple answer, the Joel, of price oil. follow the

the the quarter. And for $XX. WTI December so the all December oil November - when for what were $XX, price was oil we $XX averages in know was

the to kind So, the NGL and the oil drop the in we answer. December relation prices, in falloff cliff November simple saw of, unfortunately. in That's price

Robert Herlin

part a There's part Part a LOE. are - our that revenues of second as NGL of Joel. reduction actually to to recorded what

we me price if deceptive will And reported actual show a LOE. to of requirements, the is the as somewhat than it terms reflected describe price have in real portion that's really better try our getting. being our But not really to under reduction but... so NGL a of we I shoot Accounts indicative And of we're show price accounting that that is not receipts.

Joel Musante

we directionally, look to we sense second as wanted guidance, or get I if quarter And into that's to the production just third can see a know if can don't I for get flattish kind something I just wanted quarter? maybe you same we see growth give sense. but of a is

Robert Herlin

would that turnaround bit plant. our of I for we downtime daily say of little the in and January had a rates better are

rate, price uptime, daily January that the oil that little We're for flip that bit. impact we'll in But not to on going QX. oil side do price. we than So much The will quarter, think obviously production better QX. I a averaged as our is get a to as

Joel Musante

Right, right.

offset? So get side there on kind LOE to you of help should the

Robert Herlin

means, the I mean, of kind there and price the impact of the thing it. COX oil cushions Delhi basis, But partially it oil reduced our operation offset Mcf per Yes, a is that any bit. just because of by is offset cost about by it odd is it to isn't tied one-to-one little a that's price. on

Joel Musante

right. Right,

front. acquisition point hard the an I'm on acquisition replicate of add know kind can to but you view I is a the anything of And just Okay. wondering. from Delhi asset asset

Robert Herlin

Senior is full on another time That's deals. That's and job all working basically Steve at very full-time fellow of is helps - look basically what do hard almost out. We him they it. are VP, our Hicks, the who

we We have we follow some don't from. that very want to and hard criteria stray

of for place a area, time volatile to be do Do price been long we the be, we flow do in of let's in We of it like life, a to of to commodity cost - buy want We to terms of asset our sells gas the have that Do worry does California. our exposed forecast. have want has now. or if they the location, what to get, we size, how a can of is in want obligation head? okay, - nature gas really we reflected, scary are exposed P&A properly that's the they the asset gas into they some it that kind say, reserves, into kind about, a terms asset have, Hub, only what Because Waha terms roll they to where that that? a impact to,

consistent of You trying accomplish. accomplish the we we to is how look how a those do it mundane the honestly, have take background I'd time and they and fit impact factor what quite terms and us have how we to have it Our trying made that every it things boring risk. it. does And I at it to deals, How to profile? shareholders. no clear with we all how we how we're undue us we shareholders history what that? question it be do with does grow to in risk-return maintain fit ask in, our take undue are and into for want to desire risk. dividend, our rather our really be That's don't extend my And little financial do does is,

get that's why valuation we think in I the we the get marketplace.

very how by a that been is careful do the board. we've So we in and it. mandate do we But what

want to of board we and something a our of answer, a to the that it's conversations our acquire all long-winded meets criteria. lot the something, of So meeting every but do in office. topic around want we in forefront of at Kind and

Operator

questions this And there at appear to be no further time.

Robert Herlin

all listening always and to David or All Thanks right. you comments happy you answer call them any Thanks help questions again, hold everybody. be please if Appreciate can to you again. you I'm well. free in, feel of me, have in. as sure I'll get happy will or to be

Evolution Petroleum (EPM) 7 Feb 192019 Q2 Earnings call transcript