EPM - Earnings call transcript Q2 2020 | Evolution Petroleum Corporation

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Ladies and gentlemen, hello and thank you for joining today's Evolution Petroleum Fiscal Second Quarter 2020 Conference Call. All participants are in a listen-only mode but you'll be given an opportunity to ask questions after today's prepared remarks.

And with that, I'm pleased to turn the floor over to Evolution CFO, Mr. David Joe. Welcome David.

David Joe

you. Thank

welcome ended earnings December and fiscal for Evolution quarter second XX, to morning, call Petroleum's our Good XXXX.

Officer David We results will today Officer. Chief is said, Chief President the for financial And Financial Joe, Executive the quarter. Jason me discuss I'm, as call operating on of Evolution. and and joining Brown, you

of housekeeping quick notes. Couple

If it company's shortly month. available to the would website the you be by wish for to listen to a be replay of today's stored and call, going next

information and not statements there are a any date. may that note provided time-sensitive and be later Please at accurate

Our and discussion today will contain available forward-looking statements of assumptions management's on beliefs based information. currently

expected. statements forward-looking SEC. are listed are risks our the described in those filings These Actual differ and uncertainties that may with subject to results and from materially

everyone update on the capital plans Since news focus remainder fiscal available yesterday's of primarily will the are release, our an key call readily results, and our for on to in spending and operations, this numbers XXXX.

to the Brown. would welcome Jason I and Officer, to like call our and Executive turn now Chief President over

Jason Brown

David, and good on again today us fiscal you, second and everyone, quarter joining earnings Evolution's for XXXX thanks call. morning, Thank

XXth flow once I'm and quarter. cash earnings Evolution for for consecutive the pleased its has again positive shareholders to that announce delivered

the We improve continued our throughout dividend capital financial low low continue despite commodity results generate industry. positive the to environment spending the consistent and sustainability of price and

perhaps feel the to for shareholders. has But below more tremendous price this over share. ninth generate price we long-term $XX announced per swings quarterly our have dividend accomplishment our importantly, consistently that in commodity of delighted barrel. ability and in quarters XX consecutive periods those of in even I'm delivered been we and proud at brief Evolution a stability XX dividend have There $X.XX our very row oil cash a

although get closed Hamilton our Evolution adding It's interest Wyoming, During successfully that we the any integrated closed recent worth Marriott operated has any were by Energy. the in able in acquisition operations of this overhead. able Springs, were but field not noting acquisitions without material Dome we only also close quarter, seamlessly an to not Hot to into

This demonstrating will ability board on asset have the in to team step Evolution oil within important was that management opportunities our the and and and our transact both fit an that strategy. first gas the

the Although and reflects as realization, this is worth quarter expectations only Hamilton months' our production, performance Dome with pleased of flow. we're meeting of production, two on that price cash

price and other during overall gas Similar quarter realizations. our to performance by the impacted producers, lower oil was

by example acquisition Dome the pleased committed increased are quarter, the is why from our acquisitions the impacted and to second support This and a was of dividend. a than as pipeline cash short-term of oil more flow Evolution source repair further further the that with we're the During sales which will good to Delhi volumes. offset Hamilton

that, speaking With run David outlook wrap and to landscape. over I'll briefly strategy up the back M&A about on call to I'll the now and highlights through the call then turn the financial

David Joe

Jason. Thanks,

refer Please financial Form and to of and yesterday fiscal be XX-Q information shortly. for quarter. afternoon release of be additional reiterate I and will our filed the our to our share second highlights our for on press lookout results from details

X producing assets So Ham in for as acquired November previously the mentioned, biggest we field million Wyoming $X.X highlight, oil on Dome in cash. the of

$X.X of a million. million, cash received and $X.X October from million date XXXX, to from purchase the effective seller thereby the recorded the on for price X, $X.X payment based However, approximately we reducing

DD&A, includes the revenues, current digest quarter production and results, our it months LOEs, you cash Ham that clarified should As for quarterly only two financial be Dome are and flow. review results in

yield dividend supported is the the in with of assets, this shareholders to in our X%. consecutive our cash lengthy returning history of quarter include highlights excess quarterly Other oil continue our by

additional We despite incurred prior-quarter and million lower the revenues realized oil $X.X temporary now to quarter, generated pricing Delhi the despite in the from X.X% costs resolved. trucking total up been has of which

We of you quarter go the the in of positive a million XXth marking And reported losses it's XX consecutive of if the XXXX. quarter XX income. net quarters for net back like and quarters $X.X more last couple XXXX with income just of out further, back

quarter credit we and the $XX facility. in undrawn We cash ended million million have with a about still $XX

quarter. averaged of year-ago quarter, due Hamilton increase production increase the into XX% day a X% albeit oil as Field for primarily bit per improved to Going and the previously detail, acquisition noted. in two the barrels a equivalent more during months a from quarter little from approximately the Dome the Production gross X,XXX prior-quarter only the of

Delhi, decrease from the total year-ago X% equivalent day from X,XXX oil oil day barrels per approximately barrels XX% and per averaged equivalent decrease prior-quarter At of of gross about the a a quarter.

commodity As at to environment. quarter's small current the a a impacted to realized price been lower we section erosion effectively project about of price $X.X commenced schedule Delhi shifting from the know, of still deduction. a all we November are of trucking low million. This oil This oil ahead value and the quarter was and month thankfully. the further At be We end eliminated repair a volatile January basis planned pipeline. a from premium in the was by positive experiencing approximately to in the and resulting pipeline field, average estimate cost the have completed of LLS a sales repair

all X, and oil has As February seized of sales been to on trucking oil back are the pipeline.

of increase prior-quarter. primarily costs, directly the higher Total increase COX to quarter, the volumes. due of is resulting XX% increase production a from purchase in from COX XX% this $X.X were Delhi's portion for costs million an

was in Dome $XXX,XXX on to atypical closing approximately AFE were based expense there Hamilton a months two well November to repairs. field December, workovers attributable costs cost In date. Production of representing the Xst address the few

to BOE DD&A the the rate prior only due has Hamilton per quarter in which period-end composite a two accretive quarter. acquisition, the at This Dome declined Field to BOE. compared per $X.XX Our of month impact XX% per $X.XX is largely BOE to

to is between estimated go rate we $X.XX expected As and BOE be the forward, BOE. per $X.XX DD&A per consolidated

the reported we expenses December printing and ended higher slightly This XX-K related quarter costs Meeting our costs. proxy with related In XX. fiscal calls, Annual second G&A and statement associated quarter, include for typically current

We continue to be G&A cash expenses. and mindful manage our

It's worth to total up our makes G&A noting non-cash that of approximately XX% G&A XX% reported.

$X.XX components. million, expected and the to working understand the per we've income lower share was to EPS why $X.X share but diluted in $X.XX Net for and previous diluted we million quarter. $X.X been than quarter The disappointing, compared was per manage these or

of largely attributable $XX.X acquisition the million spend During small to at amount Dome, Field. and of Ham the incurred capital quarter, a we Delhi

modest, for about capital expectations $X.XX $X.X to for current capital Hamilton The to net amount capital workovers de allocated Dome Delhi at spending million minimis is million pretty for small remainder Field. of fiscal XXXX earmarked our and very of with a the

recently the increased It's that Phase currently project that Delhi capital the the X have us worth oil XXXX. noting a been Delhi until reported modest They deferred prices. operator to calendar development for subject to for capital has plan

Hamilton quarter, the common $X.X by company million, of to we acquiring Dome for Our in our the $XX Field prior stock of the total compared working payment attributable the and the largely dividend million quarter. decreased to the spent capital

company be reserve cash we hand, to on I to base current our assets $XX mentioned, and next through million fund the facility, As million have the year. of liquidity $XX development year and continues future credit ended in our quarter its with well-positioned our producing with fiscal fiscal

and very our company's recently assets. that the attributes dividend Hamilton of development profiles. low liquids to opportunity XXX% Dome workover reiterate a strategy to support to are like We our in-fill in our fields. their long-life similar take non-operating the two with key and have few us, would Field, our Just and Delhi fields, expected They and opportunities interest fields large field working both these decline production, oil future Legacy now acquired

$XX is This revenues operating high operating very property Just is that margins oil range, reminder $XX with bears a our net priced of the LLS for net field Delhi the override oil a which we barrel WTI a typically with per no is few past around for margin per burdens. which $XX on have the pricing, barrel prices a operating expense to X.X% premium barrel. The costs a capital operating years. in Delhi range,

is years, operated for oil XXX produced Dome producing margins a Hamilton second by in a concludes fiscal financial our field premier and XXX% field, tier operations Merit over results Field has long-life Energy, This quarter. this operator our reserves, low-double-digit top a operating review of field. anticipate we

In summary, we grow focused seeking while sustainable opportunities our to to shareholders, dividend on and delivering maintain production. yield remain

to call will Jason for final turn the I remarks. over now back

Jason Brown

Thanks, David.

on strategy. shareholder of new opportunities positioned to cash The to dividend continues company the focus fund sufficient retaining producing its stability, while capitalize return. be development financial funding assets, current and resources overall and continues flow, profitable to to further growth on Evolution for

long-life excited is provide reserves to assets that will our Evolution diversity support our to Although dividend. and another add to producing

opportunities continue can acquisition and current we BOE. The production opportunity We The positioned very advantage in oil to upside prices will to take gas is with an growth pursue attractive to acquire market. further presents price look and we'll company. to long-life company grow evaluate uniquely weakness a where the to at the per in

think validates retain Evolution's to the substantial debt. years liquidity decisions over recent I prudent no it also with

and recent support acquisition much that is grow to our Evolution mentioned, dividend. reserves, sustainability will previously provide As seeking the long-term long-life diversity producing like

With take ready lines. to that, think questions. Operator, open the I we're please

Operator

Instructions]. morning. your Gentlemen, remarks this you [Operator thank for

Grampp We'll at Northland ahead. hear go Please from first Jeff Capital.

Jeff Grampp

that it or here to of was kind there wondering some asset next under asset at own the kind now characterize forward? Jason, your decline to I seeing the upside there we guys of first Dome we had should Or cash go that that wondering was you about operator, more opportunities kind Are just just a flow? about be over with your conversations or guys capital I guys months so? a have with should good couple as now, guess I thinking years assessment? could any how think as guess, Hamilton terminal in for of any belt I looking you few And work trying you going are

Jason Brown

I at the it latter. think it's fair to as look

that's why we think producing I been years. it's for over bought it; XXX

a stable, very So but predictable. going asset, not it's growth very, be high very to it's

and at they're That this the as being one their right is said, possible. costs just value of they of as out best much what do, in and controlling fairway Merit looking middle of the is,

situation, deal I close. with that that I on part non-op about So, we of as think I've hit few as different. this get And closed AFEs is no I didn't in soon any been, this never a

maybe a got on of ESP, couple kind up But And workovers couple which an a which a predictable trying couple then think that Those P&A year, bringing pretty wells few costs in a not is is reasonable. the a that I also been and of one save I innovative think couple in reason a of we've to it's months, P&A first new here workovers of are they've of there. workovers we it pretty expensive. do. it's So the wells and to up so all waiting about the go-forward schedule, saw I'm

the the almost We reservoir, costs. that's put SP amount the we like understand feel in we in know Dome. PD&P electricity So tremendous a the happy, to they've save that field is Hamilton going a a And pretty new of production.

at move of with these volume that is both that we replace new go pumps sort that's down, them so a the forward, to lower deliver as and when higher And plan costs. pumps thing,

the that's to best So think answer I way that.

Jeff Grampp

repair, any I No, Was David your in down as guys would noted, know And it basically line and it. with at trucking related to that expectations? production detail. where pipeline few you think shake actually that. kind a you impact Delhi of any the that was but Or I I repair? great kind was sequentially. obviously look was out? that that we cost, production that was highlighted of percent there Got from Or guys that's production appreciate thought

Jason Brown

it's Well, of kind a little; two questions there. there is

the say But are were integrity, the the happen. sort trickle it that disappointed there it the can't things pipeline, production. was we so repair repair. we needed there. to with That of was attribute of planned I that to happen little I a think

pricing, we on instance, in blending dial could go. upgrade to projects, we For were terms that back that to we in where able the had amount of get an

would. to less lost as there up we of well. ramp down didn’t I with some that in back wells we production be didn't ramp thought COX high there's a the we it little September, up had -- that shut think that as And didn't the quickly see we So as revenue come a

that of a Every less situation. And probably there harder that it because I the aggressive hit increasing of think is trucking. being was because dollar they're little

were we I don't qualitative, disappointed in So think that little overarchingly expect the and some quantitative to but January. little bit a we of we quite have see it's and a

Jeff Grampp

it. Got

given to dig a deeper sounds during cautious that in little kind with there's be of that you're just this were for in the from operator was and thinking observing So rear pricing you're little that like on from it wells? terms just as that right, your and of bit, up guys And now the view conservative in discount you the that guess that of some guess them to I not ramping maybe I the here perspective producing a production, some maybe opportunities period?

Jason Brown

do as the more issues now and three that's over in seen okay, At Conformis those. not We speculating we're a Well, then little last we've new we've workovers, which months. that them the some And approved just getting there's couple few there. are they're table into think think on are budget I budgetary bit. fired I workovers saw going And there variables a typical, several on year, well. -- and and up

it's think combination of several timing kind and I So issues. a of

fair So We're pretty I that's assessment. feeling positive. a think

Operator

Next Please we'll Global Bhakti Pavani Partners. from hear ahead. at Alliance go

Your line is open.

Bhakti Pavani

to upon touch realization. they oil of were wanted this that kind know I the you Just price mentioned lower quarter. based

at factors understanding you do level lower wanted of we how realization get So driving on just forward? them going do a those to to kind better remain what expect and are this

Jason Brown

its the beyond last back is it creeping closer the the amount, biggest November $X. a to and seen, generally barrel Right year I premium premium sort had lower pay to during trucking we and biggest Delhi lost a think of of LLS But fluctuation impact for XX.XX $X.XX. an WTI we've that kind for December. way get was because seen up. normal It's we've impact of Well, that we it's now, we -- averaged

premium the had. eroded of kind that So that we

that impacted that us. So

Now we're expecting that couple got to which had dive that very weeks ahead meeting our finished. think of very we was that into the great, And time. happy to technically, they by we're I that they hear, happy were that of a finished Denbury and into go to operations March. Planes ago, got way with that

the weekend, pipeline and we we're this flowing So up actually the all pressure back last now. through

trucking have costs the So ended.

Bhakti Pavani

Perfect.

be be expensed million only or $X.X don't expect the at in for QX accounted So that accounted was point, cost, you in that QX this to anything will is correct?

David Joe

$X.X clear, price an in of be it’s recorded to estimate Just million reduction Bhakti result this fees is value David. book as and a lower price as we trucking expense. lost of That erosion a the realized of the not Its costs; in received.

to and with. it what we're could no next we as quantify been necessity well. flow there have So trying but reality if trucking to were quarter also to was a the live that will have number that's the in just a January And

Bhakti Pavani

it. Got

Jason Brown

back Bhakti. February so flowing. expect would Yes, got numbers that I yes, in think I X online it, we January's give Xnd To or

Operator

Instructions]. [Operator

Capital. from Brown We'll Brown next Bruce hear with

Bruce Brown

Good morning, what have a at point question you consider stock expanding better The is investment repurchasing gentlemen. do production? than I

Jason Brown

opinions. you, investors a with tell seems good question. everybody with both about. and it's -- like one I that the we is has And different we it's one Well that and and also talk talk it's And internally about it board this

say it's it market. a I falling markets in things mainly a posture if move there our million defense stock a There's catch that describe far sometimes as on tickers, I we like catch-up, So approved. the and couple in has of, buyback has still that. different defense. was the been out a would And And one left do different to have I knife, program tiers

quail taken traditionally shareholders them. to like shares it our It us feel purchase hasn't sort many line that's for in falling too of any and supporting We prices. protecting with

the real Now, us off definitely stock that I that is can at take at it, undervalued, every we to we're an Certainly, purchasing that the it we become to that market offensive switched what and mode. it’s where our acquisition point by understand is strategy share an as going X% lot idea to months feel really said, eight think we have in more almost it's That like we're good the on We're that seeing because next deal flow, of six, than a to be it. being just a important we are and we grab. pay yield position. don't short-term believe to that going

most to support we producing the about came at back that. XXXX. are the this, I shareholders. to barrels going dividend I to Well, I over that $XX pay for value The value people like you and Dome barrels thinking are been if to that, discount but instance, tremendously those XXX do don't XXXX need years. in to day us they to in said, our We're to value it's how million all, our those for

to feel and option of company like opportunity XX years. to healthy the XX, almost to time next it’s and support and tremendous garner So inventory a be get we our our be reserves position a able right us the financial for to that XX, value to on capital for be able

So of with we're start the -- that's kind us, opportunities. we're the excited just pretty about

Operator

[Operator Instructions].

you turn signals phones. remarks. see And back do Brown or Mr. not to I our any gentlemen, for I any will additional closing from it

Jason Brown

update and providing you everyone us All today's your Please you with on for participation contact right. feel thank forward I call. with look thanks any May. free Well questions. in to an to

Operator

this all for now Ladies thank participation today’s and your telephone you may disconnect does you gentlemen, lines. conclude your conference. and We

Evolution Petroleum (EPM) 6 Feb 202020 Q2 Earnings call transcript