ESTE - Earnings call transcript Q4 2018

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

Operator

Good morning. And welcome to Earthstone Energy's Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation [Operator Instructions].

As a reminder, this conference call is being recorded.

Vice Earthstone Mark Lodzinski, and Lumpkin, Officer; Scott from Robert Executive Chief today and President; Finance. Anderson, Executive Thelander, us are Chief Frank Officer; Financial Joining of President Vice President Mr. you begin. Thelander, may

Scott Thelander

Thank you, call. our welcome and to conference

Act I within and Securities we statements Act remind you contain meaning of XXXX Securities Section Exchange of the Section of XXXX like that Before would Exchange to amended, call XXE amended. today's of and started, will the as get the forward-looking as XXA of

of be and may going replay. A longer by be information today, this to Investors via call replay speaks will measure Although, can more these XX-K time-sensitive site, call in and our assumptions these can should described These risks as certain Reconciliations risks, www.earthstoneenergy.com, along believes to underlying also report accurate our the for in This found the to vary they non-GAAP materially. section statements released call of includes March today's management available our presentation. time certain yesterday. directly to documents announcement reasonable corporate of actual are under earnings prove or updated incorrect, assumptions information yesterday Web most correct. These expectations, non-GAAP telephone measures. give XXXX. on will financial in XX, Thus, annual based XXXX. only Should Web any our note financial be also they conference of statements section GAAP be that Form of one to recorded references and these on with are earnings site, are subject no in announcement no assurance measures results at by uncertainties Investors the comparable may of the contained released please or Also, prove of replay. as on any Earthstone's materialize webcast an we

how providing regarding about announcement call followed over information and the Robert performance will our remarks operations. Frank, Frank. to You to activities Today’s can access overview Mark remarks by begin and financial now plans, released regarding an our earnings find from with yesterday. concluding from on our and matters will I of remarks turn from those with future call

Frank Lodzinski

Okay. you Thank Permian And you, great folks progress line. thank our XXXX. made that all for on for Scott. Basin you and XXXX of assets We are in high expectations developing have the

to you out Using I'd web have and years. a XXXX of to as the Before we release press that that we related we refer increased a and over page. for our presentation get page the eight presentation a also posted tell to in that that you a made the In to demonstrate we you to into daily as over XXXX our remind we progress XXX%. ago, our I’d company production particular by of like updated details, couple the last base reserves in put like average couple weeks on our and whole yesterday XXXX

our ending in to we we’ve can we EBITDAX is BOE we're We've that fold, operating them things, to of our five working have debt and We expenses those of adjusted a XXXX continue types of EBITDAX all have couple increased cut to X. a of up at least X.X so. do ratio to in expectations while hard do accomplished with very that G&A years XX%. our about half lowered our - adjusted lease We by per

and So strong cash we're under levered forward 'XX. to looking flows

if targeting unit LOE our basis. and operations and a in During free 'XX, our our per on administrative increased we costs increased as XXXX, we also drilling are and and mentioned, production before. reduced substantially We've and efficiencies not completion cash reserves our and flow proved we've

program balance we remains operators. assumes very activities they about and rig capital $XXX million, sheet operated XXXX set which non-operated budget X by at currently substantial Our proposed We've liquidity. and have our strong as are

our minor Ford. We at activity also operate in Eagle have some

stress we've while we base we'll to production efficiencies. drilling to and and will Robert build of demonstrated continue Mark. market transactions exploit that 'XX we significant greater financial to added longer we will with details increase to and Robert, then disciplined and allow will to pursue operations. our I this completions Robert some and capital do continue acreage on I'm in highlights matters and effectively relevance. call I'll remain create scale Mark As and turn only believe acreage sorry. acquisitions But also pursue to our enhance to continue value shareholders. we provide asset that discuss acquisitions even will want our substantial And that over will for through trades course, will laterals follow-up

Robert Anderson

few Thanks, A Frank. highlights year. from last

of oil equivalent day. a XXXX XX% XX,XXX X.X under to production Our volume total net just barrels over grew million Boe XXXX

million our Boe $X.XX grew of $XX.X million reserves on million EBITDAX our amounted Boe end XX%. proved development reserves. generate primarily Based of efficient $XX.X with costs $XX just development development including expenditures million an per reveres. XXXX, significant discoveries reserves for proved and proved to which finding XXXX, development our us and and of at full in in a our Boe and in overall XXXX the And the activities finding XX% per Boe of of approximately acquisitions acreage Our resulted for proved of XXXX, of to year almost $X.XX extensions versus from capital The increase XX.X costs a grew bit revisions. added allowed million drill quality Boe $XX.X increase in discoveries $XX.X Boe to adjusted million to of the through from extensions,

pleased As we evaluate position and in the are operating the and of and efficiencies. greater targeting in what operating well we've the our of almost two with years quality position are learned Permian, we improvements even our performance acreage

a fixed in to proportionate per operating basis increases production which Boe and margins. We and increase on without administrative down expect will continue costs costs, to build drive

to continue on acreage accommodate our longer our laterals position increase to and work operative footprint. We

lateral currently to an be similar increase end to be said, of able a cash XXXX more based territory in to back compared average lateral example, of complete an as And financials. With to XXXX I'll prices XXXX is we As one Basin in our flow on Midland and lengths turn we non-op XX% cross will it activity with to into that with length a Mark rig, free our moderate assuming a XXXX for review for are over mentioned, a experiencing. than commodity completions. program And weighted. which program XXXX somewhat expect wells close to feet, completion expect we

Mark Lumpkin

Robert. you, Thank

and in XX% our for Looking quarter revenues sequentially prices to a third million starting and realized due to XXXX. the line the at over sequential the third compared down of largely financial in $XX.X XX% metrics quarter The revenue was decline to quarter compared top with the up of QX XXXX declined fourth were the quarter.

approximately and is XX,XXX XX,XXX was for results. We're to offset XX that boe periods operator day, of XXXX shut fourth XXXX over an the impacted boe per which XXXX three XX% by XX,XXX day average that per boe XXXX production quarter production day gross gross Our of projecting to XX% across favorably activity. operated to due during will approximately per non increase completion wells production was in

terminated other at at our in Our million which gain fourth NGLs gas. higher of crude costs hedges quarter natural mix the in in net with We XX% line income $XX.X XXXX of XXXX Energy, NGLs up $XX and the crude coming income for a mark-to-market or about December. in XX% making which compares related share. $X.XX and is reported a component XX% million oil, reflected quarter oil, a net per with fourth in $XX about XX% full year on Sabalo with natural transaction million balance. proposed to XX% to the transaction XXXX production This of mix and our quarter our mixture gas for XX% largely Fourth about expectations includes unrealized was

we $XX.X reported the XX.X million down of and as income the it million For net quarter million XXXX. fourth in EBITDAX, define per fourth $X.XX quarter million from in of reported quarter the third the $XX.X we up was share. year of in Adjusted XX.X or XXXX, from

a XXXX downward trend EBITDAX anticipate We year LOE per compared XX% grew continuing averaged the to $X.XX $XX.X of BOE per BOE $X.XX and was BOE in per in full XXXX. striving quarter BOE per $X.XX fourth to improvement. XX.X $X.XX adjusted LOE million. for BOE $X.XX per for are million XXXX LOE continually from XXXX, for the For year full to average

out in in based for but incentive accrual just quarter XXXX Our first for flat This accrued of of cash quarter G&A includes relatively compensation fourth an XXXX, million million. expense excluding was versus million compensation the that paid $XX over XXXX. as annual stock a quarter fourth $XX.X $X.X XXXX the was

$X.XX compensation G&A Our the per average full year. per based metrics, BOE BOE excluding stock for

We presently continue for possible. as guiding $X in managing We per focus a projected BOE do XXXX as to efficiently G&A $X.XX. cost of our to structure are on

sheet Now moving balance the to and liquidity.

the with from quarter, by acquisition was November for $XX and strong. base of December approximately the million approximately $XXX almost accounting very borrowings company million, cash has so of trade facility the additional the our million. capacity with largely in our saw fourth which facility $XXX us At credit $XX.X to base. XXXX current During on on credit we XX, outstanding acreage borrowing credit million the for remains leaves rig $XX borrowing closed liquidity the our balance This facility, increase This $X.X and fund million. up undrawn under borrowing million

fourth capital of resulting the million million, for approximately quarter $XXX.X totaled $XX.X year excluding in expenditures capital Our acquisition. full expenditures

guidance XXXX to favorable awesome million. we oil XXXX XX% and bit with in even prices And mentioned, higher of decent of XXXX a average hedged and hedged slightly Frank XXXX price the prices for $XXX on As for old CapEx in We're side. we approximately on the of very well our be midpoint XXXX place XXXX total got with an $XX.XX. expect at

operations. to with Robert that turn it So I'll to review over

Robert Anderson

Thanks.

on of in run accomplishments to rate in XXXX As we've we program. we're executing highlighted our our operational XXXX continue will and proud focus effectively

Midland, targeted Spraberry including we programs working with throughout average length a maintained an and a with and wells XX% Counties wells and an average wells Upton of average in lower XXXX XXXX interest the B drilled A, working the rig with and Reagan C lateral of These intervals year and one formations completed multiple Wolfcamp feet. During interest. XX% XX we XX

is on even is and or gross well position well X in-line gross progress, X.X net the completed in both exceeding environment completed current including In December. gross net X.X to close non-operated we attractive barrel now and average producing. tight our all considering ended hedge price X before XXXX with year quarter late wells, online performance our X were oil operated curves per in and expected to averaging commodity in both generate $XX XXXX. fourth Our economics and activity, with in We includes wells of are the which the wells which level

lower. and a feet wells we the are Wolfcamp hold late days These hit where in Let is and feet in offset A, B well those new yet. completed increasing the XX Western me wells, the of closest their a lateral peak XX% wells Wolfcamp the The about B offset highlight pad and B we target. December. being not day wells average wells in rate same our two was in were XXX with production, length Reagan It County interest. three existing unit X,XXX rates still in XX have upper in After approximately Sinclair the three working completed

zones We been peak but of since the to to producers the time Wolfcamp XXXX. likely on which Wolfcamp B and is in producing completions, past existing the rates May the it's due A with common have this experienced B have extended in Wolfcamp unit quite

rates Although prior the still starting performing They of wells to per rates at are wells cuts line current with our wells are day with are are two than oil up, from XXX these of cleaning XX% XXX a the however, Boe out day in three expectations. XX XX%. new to three lower ranging little

the tracking is well original completions. upper B two the instance For

two also the these now months, back new around an been of I the XX completions will and Although producing expect original during of recovery expected. of them equivalent three we the for wells XXX oil barrels shut average original are two per in online ultimate approximately have that fracking wells that as note those, producing were only to foot.

and evaluating each wells, and takeaway new our is Our the these area when wells Each results still it from issues parent unique. well are completing determine as we bench benches somewhat existing units. that relates co-development optimum multiple and to to spacing will operations of design frac child between be

economics. spacing comfortable number order been news operated Having we tangible aggressive in nor years decisions observed may in maximizing close and to and XXX wider good to our certain of asset and The basis. in development areas We Midland driving from both on are that future costs data lessons as in for are our reducing our our team with recognize on achieve have metrics, need ventures operational relative Basin however seeing acceptable we we well and industry spacing the in other efficiencies, complete foot spacing are economically. practices we've is absolute in not we that areas what program. These for can is now, focused two a improvement

cost wells We've average go presentation in in XXXX, an despite eight our release a length in rig XXXX in the compared efficiency XX.X significant to able on the website, operations. half XX%. drilled If from XXXX similar page completion by We time second operations achieve a days, XXXX of length of drilling our improving of our completed production and through. refer increasing the to is that you nine average last reductions to slide lateral in has statistics about I'm XX% lateral been feet, the reduction by of an which with to

reductions XXXX, efficiency recently day pad side, In but we And standpoint, XX,XXX nine a improving X.X increase from but even we per early per XXXX XX% costs down were driven substantial. our a finished January pad frac day. completed stages stages last efficiencies using sand. last per Basin completion up we fracking a year an our completing by averaged in XX,XXX to end in two averaging operating the well gains to multi On day, at shift per stage stages $XX,XXX day. cost three our cost which by From wells stages in both well all-in more summer also under is per were X.X per to more from stage, were

For about of working working average an wells our with with interest XX of XX% operated XX%. wells an to program, XX expect we XXXX in while completing average interest

Wolfcamp proven is our mid is acreage XX% a County and we rig across which working B Currently, XXXX A Our focus have Wolfcamp on in Midland our stage zones results position. interest. drilling in have where wells the five our unit,

XX% unit just participating interest. we also where two are Wolfcamp a We in wells offsetting this a have working

wells these a as be result we approximately direct will land laterals, of trades XX,XXX during foot of All did XXXX.

first three XX% days that with XXXX, completed Upton each have working of We quarter one wells that so online far flow in have working interest for County an than Central Reagan where been are to has the two and less XX interest. in XXX% County, beginning in back we

this quarter Midland over wells year. So expected third then and XXXX first of wells the XX in the production final for operator December November online of days be the the to the are five remaining and wells balance five in County

growth a that online net three And of to end waiting from new came XXXX. production XX the in X.X at four and plan Sinclair on expect We with gross XXXX wells completion. of wells total operated the XXXX wells including right end result drilled we will

$XX mentioned, million budget operated Basin is operated million, We're for activity $XX Midland activity. non-operated rig Basin. As includes in for also Eagle capital our which $XXX for XXXX program Ford million $XXX targeting one the our and million our Midland

well of growth us our the year approximately applicable to XXXX completions capital and position XXXX than our begin Given is should the XXXX. pop second rather half weighting which end of to million for $XX XXXX production really

inventory, of Southern with with grading, longer realizing pursue intent operated the and to our focus and trades a efficiency. laterals in continue on acreage Basin greater will increasing the Midland acreage operating drilling We

well intend of Our we we sheet pursuit potential strategic on strong supports acquisitions and being balance as and as have in demonstrated growth. disciplined

have and We returns our position attractive efficient and position. corporate benefit operations hedge acreage from our an will level

cash designed low to rig prices reach a while maintaining flow and leverage do As to commodity is I currently program current this our want already positive XXXX up? under Frank, profile. in have wrap program you mentioned, our one

Frank Lodzinski

continue on we we today industry our again evaluate and are a location parent-child highly achievable. concerns mitigate And our count our out results specifically new both on point I'll our well the be and prior the drilled. time reasonable to twice our cash to effect We're economics. in I want positions of believe it and it and lightly to say positive about production order based said effects on market of redundant we've free called acreage Once also are third that to Sure curves are aware practices type results flow. we targeting so the very wells.

want returns. our good three maintain and generate those have than and listening and more for a practices basins through for in Meaning I we'll balance only to focus And acquisitions strong basis. multiple for value fundamental transactions items operator been our questions. increase clearly Finally and our work decades that can we take accretive daily but shareholder any stress on to to scale efficient effective if that shareholders. provide remarks. diligently sheet control a that to are on continue operations to mergers, prepared We'll to now our Thanks cost

Operator

Our first with proceed you. Dingmann your SunTrust. Thank question. question Instructions] Neal with from line Please of comes the [Operator

Neal Dingmann

about past? the but how Robert, my this wells Could cluster Good you that, like have sort in the sort you I of to forward you talk you little going plan you question's morning guys. you. plan for a how cadence, bit mentioned know to of

Robert Anderson

that five area. area process following and a well in year County, and we're be a three probably completed those one we two a five in will in well well bit separate be at this Neal. little then all get drilling then completed last now Sure, got Like I the right we've said, Midland of time the wells

how that's works again, a one-off basis completion that of planned them part pad don't you've groups do batches. try definitely or And we and try year. our that. do But we out do So we the and on efficiency way is that's to well our in got

Neal Dingmann

talk could maybe about been cash then growth And versus expected? had just organic bit through than a you if your about better free M&A Frank, flow

Frank Lodzinski

do known tinkering. long for a you've this to I’ll time. Neal try Well, us is

positions longer acreage focus of basis smaller and and to day maybe block do move primary up that current to acreage acreage and is some day on Our a acreage to trades acquisitions laterals. our

You can achieved. see that, think I we've

we our web count There's babbling by there's shows towards you'll that improving. is have in that page . our And see our that a that where length. somewhere, you is - think prior presentation lateral compare out I’m to laterals there, Although we put what longer inventory if I

So to basis. we're that do going daily on a

over look and in acquisitions. We a for that The are last day. But whether larger whether looking for market sheet everyday leveraging in positions, quarter of without and year a the at it a acquisition done. said the easier storm. unfortunately M&A We large and trick perfect it's than the that's there or we're is are the that's the balance market had to had acreage great course, analysts to fourth build accretive scale every

do So the leverage Neal. and over just we're I how but answer don't any that going know to better, not to something company,

Neal Dingmann

That's all. spot on. Thank you

Operator

Thank you.

Heffern is from proceed question Capital line of RBC next with your Our question. with Pleased the Markets. Brad

Brad Heffern

It not performing like more the to on B maybe the little Lower curve. one Hey, unit. in on good that's type I a Sinclair it's sounded the well, morning, bit Robert, dig that's everyone. wanted

only you maybe was co-development just test a in one full about the makes or thoughts in field that whether if targets having curious mode. I have of B there's you two that think sort So, any

Robert Anderson

B. targets the can they and within how we oil two go the multiple you enough if you ability quite together. but you of but trying It's definitely figure just decrease to you see wells Brad, spacing, where number are that possible, have we're to total drill know again, the the still still do it's thick place is adjust maybe out in wells, close that’s,

Brad Heffern

the in question, how it. M&A Okay. Ford the Got the on about thoughts guess fits longer then side and And term. any it new of I I guess Eagle other

Frank Lodzinski

looks science going to the expand will and our we continue that position. production every position some maintain that of Eagle a is the from consider of We we're acreage activity offset in to from encouraging. a our day, on some some or that was Ford, of better lack word standpoint preponderance those put acreage not There wells

an $XX at will candidate a small or offset have aggregator money $XX know that I Eagle I a some the prices it putting you point. pending see activity, commodity see lot program become likely don't like a of into don’t right us We million us is being it, Ford, divestiture in million. now

Brad Heffern

if the it's for per that XXXX? over Okay. more could sneak fourth the third Boe what the there certainly and And Thanks. than on just quarter wondering I was with then on guidance one just obviously versus elevated LOE I in quarter, higher basis. the doesn't for was work a

Robert Anderson

in was with a of stands relationship I where unusual little quarter. had causing think up we that us like an or expenses LOE part relative, over There's how of that Brad cost and did work higher the ended we that anything out nothing that. wells vertical fourth trades some the of much our the a that

Brad Heffern

thanks. Okay,

Operator

Thank your you. line question of Please Securities. Aschenbeck proceed with Seaport John question. with The the from is Global next

John Aschenbeck

and thank for questions. my taking Good you morning everyone,

factor a pursue of then and obligations? less delineated if limiting drilling I one tests kind could conclusion is do Robert, curious your if your your about you be would feathering you I follow-up a parent-child. hoping of there to on to remarks on your zone need going just you first development For interference that multi do the multi development my move flex to how you How was suppose and plan? going some ultimate quickly Well, forward. also zone forward? think And intervals, and

Robert Anderson

this have and obviously. into they're John, obligations do built plan some our year, we

Midland be asset and We in County drilled and so where B operate A that'll up. are we fully developing our completely the

producing. this it an good test, benches year to area benches. was won't taking two into where in in example wells And so co-development for The of where a us multiple it already terms three a we're it had happen Sinclair but account makes of sense

areas So plan event wells and pattern wells it's would and also. existing we're already how is to the all parent-child of certain and a while relationship kind the starting hurting ultimately and figure and XXXX co-develop the out to some production where trying we on where new to and maximizing five mitigate drill

pretty testing we and the in the three a three Midland the with at of County benches feel whatever Reagan middle existing going or a and instance our later in being time that really or Wolfcamp Spraberry parent and just by but County going where might have good later to that of be D and results could Reagan some could that two also the not enticing developed we recognize developed without those like we're have we look Upton one benches for strongly up be there. Regarding acreage have we well recent influenced certain County benches out blocks in stick B all in certain with we're and economics areas A to that do any testing development

not those on any to foreseeable doing call we money and develop we're what So planning stick future. going to for the the benches testing we're

John Aschenbeck

it. it, got Okay, That's great. helpful appreciate

but all my know of a be your not flow the it's creation. cash question in comments of For more deeper regarding industry will certainly a conceptual flow recently, I hoping in of that. concept some value the of was dig achieving if lot I into free end gotten little in has all free cash XXXX a you follow-up, press the to

in think then of Earthstone is you free increase where how some the maybe capabilities. the at Mark curious, benefits its future today to generation cash your about state cycle, as flow grow guys flow important and just Frank, scale Robert, to life business reaching cash more add generating opposed the of free continuing it So business when Thanks. and is

Frank Lodzinski

Well you that's Frank. - is know, okay, this

of value three had market. druggers, than of we We're on an levered more to to that after said over I peers didn't preach So into the alecky so XX That many trap building that if being a would years. our in keep get unfortunately being not of experienced. the decades have provided smart however enough independent I my

So work to cash if the to there. markets flow, we're get free going diligently really want

whatever a develop, block to up continue and our parent we benches, solve this over inventory the such the and not here when second sell can ice or increase perceptions it's that third such relationship have to you. change old While that perhaps But prove Eskimos. market change, if acreage, time, market the right perceptions that to child up adage now, additional when of our or trying we on rig that rig staffing bring

Mark Lumpkin

share by companies all just create thinking about John, rest value comments. heard investors focus day just follow has on with cut our well possibly we're we free a E&P your all per a of got a achieve how more in years And that One think that, couple free a large few drilling versus To panacea have all cash for flow its cash flow and if flow. of have industry. Mark. small. otherwise. I'll assured is the characteristics. year clearly shareholder to the don't But last up you've point the so program E&P outspend ail think tomorrow E&P don't been every all we same cash and we could companies from in and Certainly that's not more you little the that

plays shareholder You don't couple seem to inventory and a program, free to for order We maybe with a know we're that couple create in of to years, to are the certainly a similar looking a great best is a how we options initially flow positive, lot at continue doing. looks free have frustration of trade got we more it's that thinking multiple a digesting cut out They've and what that whether or our other well, where of learn options for acquisitions. couple flow that a like will There's in industry value. in price. improve part and XXXX. different guys be the in it of things organically about higher investors don't that We cash some this of story. what's earning experience -- what think at with years the years. have know maybe say asset math but But this every through day asking investors our know terms of would the stock season through is way cash to what know reaction great in We the plenty and a we certainly operations we've over positioned from two to seen got we're

John Aschenbeck

time. appreciate well for I the Thanks. great. said. Okay, me, the color and Very That's it

Operator

Thank Company. you. with your and The Please Rice question. next line of Mills, question is proceed from Johnson Ron with the

Ron Mills

of questions, I follow-ons sure understand want really issues couple earlier parent make to ones. A Robert. child to the on I just

referencing within formations between where each that relative You're spacing fair lower or but also just or with upper representation? B there's not is different spacing the A formation, each the

Robert Anderson

and and their exercise data. the we're a industry and learning Ron, horizontal is it XXX a vertical doing feet in as is about A B going Yes, wells we distance B terms what too us things that in through we're is as well spacing horizontal the that well sense as same what and and between so then only B upper and bench, an lower with telling two of worry in but not between upper

Ron Mills

about how about to that targeted the any And and the talked about the lower how as can there? data your lateral the is support zone you be there in think B and different the optimize in go lateral may early that couple to review you operators you back thick go least you offset on future Is a area B question and in in your compared is target at something activity? back pad, the reference response And Sinclair earlier still laterals. enough to the lower

Robert Anderson

question the just is because we B. local and landing good consistent different have in the area landed every our been lower same B lower we upper but where a That's we're about the a to with in an pretty particular little well area wells the as our of area original geology same B this

a locations. is Obviously we not are spaced undeveloped about are comment it's one those that. nothing wider a we puds, I'll Again of proved all number than of do to wells lot large different So there's global be. of kind proved XXX make sticks spacing have how locations need feet. are that, lot have our a and widely just

we is our spaced in reserves too at affect any that doesn't that down if determined all. tightly So the proved road it event

Frank Lodzinski

never knowing Monday the know or are that you unquote by in all the reasonable been solved. aggressive stacks up our an achievable we're on that drilling slightly different years very we and of in you we every wanted issue With put aggressive we us as think let have out it and can't and guys areas wake our have forth as reserves we've over cognizant information are day. quote point Ron this you think these is just but do to was that geology it and the we you all studying so know out don't and different I and there we been

Ron Mills

unbooked Great right locations both at presentation on your then just and that then I have and includes look you XX where Robert? gross booked when Slide inventory your of those locations

Robert Anderson

right. exactly that's locations proved non and proved It's

Ron Mills

locations assume proved are unfair? this the those still or you from said look down above we booked but do we or move And from and spacing well you're at when table proved is should foot a particular you that standpoint non XXX know XXX I to proved

Robert Anderson

number of layout this foot is In XXX general of spacing. on based locations terms

Ron Mills

Sabalo of where of use to the line reasonable Frank going sight a as you, an it you of acceptable Okay, sheet was, our timeframe. your relates within you for think we're to kind hey, for were leverage have down the path level you great long not thanks. right then I ratio acquisition it to where, there's as get this afraid kind And to as we back balance acquisitions the deal one

in away assume happened walking only not a the what that deal, that's basin due fate and then, commodity with suffered since from I prices the deal given the pricing. So to similar that

weigh transactions, you if past So had set today or were that larger versus opportunity months you does look announce an know, deal? it five six how to when even ago you for to set

Frank Lodzinski

our transaction and there's every there and we're sentiment out going a were that we let Well, which none to we It's secondary large the of I'll buyer to say things sheet not out the matter as matter as of I'll probably balance were are or seller of the on. we is control. chasing, like get all lot changes. some there's that week of that changes chase that say that sentiment the

we have going asset can't production have do flowing on component thing tell you good just we're XX,XXX because debt, some that there to to find debt. on out I A So last acres a the deals is non-cash buy right.

we That executives production that that that Mark over shouldn't to Mark our in on that So brought have without core longer folks and long here working day. we on doubling We're Scott this time. double have with G&A. that we like and core have others term folks together we're done track every repeatedly been it can I record say our a just the stressing the the hard

we're out to what tell day. every I there don't you. else So know

Operator

Thank from proceed Please Global Joel your you. next Alliance the is with The Musante, question line with of question. Partners.

Joel Musante

weighted for an I just give had I on given rate was everybody. exit morning, back question to good if year a program, you the, development look. the -- end us Hey, can might what your wondering that just

Frank Lodzinski

Since known I so each was I'll no, Joel. higher. long, to Hey, say say just other going we’ve

Okay, Higher that's than good. year. this

Robert Anderson

the I expect quarter. fairly third growing to production say fourth But an would we and weighting quarterly directionally number half not flat to the in start first and give substantially growth is. backend we're directionally, bit and with rate the there's the moderate of a year what the and Joel exit more that

Joel Musante

foresee activity Okay, and downtime any from do period? maybe completion you know during offsetting you any

Frank Lodzinski

of lags kind models. our have just think into that in lag Well, some little we’ve of in. to factor And bit general you would I a built

of situation some to dependent really of be unpredictable prices a that we have we when deal have all course just are quality it's at is can't offset availability the with, commodity high it's operator of situations. on services an fracking to models forecast in going to Our that us and all industry

Mark Lumpkin

that the look kind doubt, no like we XXXX to due fourth on led We average, of offsetting the shut Boe have a was much it that day, do to per quarter, fracs. better a might was think and that what on handle in, bad confluence events of

factor than guidance clearly been into good risk we two before. of if as January, the job Robert done that, we we out in you this And, hadn't some that put think that that, embed years. operating about very mentioned, did in we've the appropriate And assets less a for to And accounted that year we first our what full in XXXX reasonable Operationally in for can we've we think a the better calendar go standpoint, improve. modeling we've and was from were manner understand really we and guidance. offering an the and wrong asset continued With assets.

Robert Anderson

The shut own other to Joel as is to our as at far properties it own say is I'll have of year terms relates producers. where going this to where we're and locations in plan least in our physical offset our

We have well, could that's when the or frac some that sight offset number case. have from on that's going of operators limited who we're and where some We of us wells occur. impact you know line to get could issues limited on have

Frank Lodzinski

fracking five going start So when? Joel Mid-States, at else have whom to where to and is and Robert we're there going wells out for we're

Robert Anderson

June. About

Frank Lodzinski

with Abut right. June. Right those problems now we see associated don't

Robert Anderson

No.

Frank Lodzinski

doing? And offset just are depends on what guys

Robert Anderson

Exactly.

Frank Lodzinski

That's there. smaller with be delayed, that could industry issues whatever. out the just has particularly it deal in to the could shut as for could So be companies that it be

Joel Musante

Right. Right.

just then, last one one. And Okay.

this nonop is mentioned that cash include and activity, be that it flows on you achieve You based to similar next neutrality does or a that, would program if you're the year, want operate? just year to

Robert Anderson

activity year hey, nonop somebody this makes bit But economics participate want CapEx a normal expenditures than in we and anomalously around and kind will run it we nonop includes then the does, think sense assets again, and we're of will rate year. this of be XXXX lower is a a that is. to and at will in then if we high. higher drill, rolls little get have some whatever It normal capital particular good look XXXX says, in of XX wells at our in what area make kind a it sure We

Frank Lodzinski

like shooting $XX can nonop of that whatever the be million as and think we op. pretty enhance continuing you know it we of trade did look think nonop this budget. basis. back in may And, on in if high that or then But more the you always we million but our for op that was Yes, this a the year and nonop like capital we head didn't September looking increase October participate. is says guarantees, ourselves some for so control trades stuff is we Joel, our year position. be that no Robert to We're be do end $XX operating, solidly of We good this we'll looking we'd maybe like year to

Joel Musante

look and lot. well, it. Appreciate work All Yes, Okay. like, right, it high pretty interest. a was thanks

Operator

you. Thank

line with Our in next question is proceed Imperial Jason your Capital. the Wangler, of with question. Please

Jason Wangler

look of perhaps you from are dovetail to as makes along on some operators the non-op at is guys Maybe there coming simply are maybe guys. and or Joel’s morning, capture that than question the higher lot you the Is acreage Good on number side. that XXXX a that opportunities beyond. just that it or

Robert Anderson

or go and to in implement foot drill, out trades XX,XXX that's It's you gotten case. order it there certain their one where to plan, the particular and laterals ability in around what have an now in operator to has

participating where their we're case acreage this and have fit we happening and planning block other its big The into it cycle year. a again and

Frank Lodzinski

by what our of Yeah, in. we so I know capture. mean But for this think areas don't want -- is things or acreage I word. but is you it's not better this part, This lack a participate and on is, don't good to optional discretionary that

Jason Wangler

Okay.

So it more right a And timing it's it's just happened thing. of said, more now. you of like

Robert Anderson

Exactly.

Jason Wangler

things but at I to of you do as the But few look on off, completions process -- can and plans things assuming you and is easy off expectations. there, them of of completions side, are the they guess. pretty later year, operated Robert, how now, there this few get obviously with as those things a or batch to the in get months it's your up you now, And just about it's setting I'm thought in going kind kind get line and kind that think a the calendar months into kind of into

Robert Anderson

guess timing as integrate all say very schedule work possible. closely and pretty one nailed got oil We planned. they’re as company close would frac with I their with that No, that to prices it we've sure make our if they down but out. when sudden my go of have fleet a a of works our know full timing they schedule pretty their may and and full frac there's a is skyrocket, up, the for schedule the demands year

So out we and company with frac service the whole plan with other the companies the the year

Jason Wangler

it turn back. I'll it. appreciate I Okay,

Operator

Palmer. you. Please Thank with of is question your with line Our proceed instructions] [Operator David Coker Beard next a from question.

David Beard

Hey, good morning gentlemen.

Robert Anderson

morning. Good

David Beard

well Maybe back just color spacing to relative your going in any and to give can you count assumptions inventory. the well

but somewhere I foot, than puds mentioned wider at think XXX. were XXX the you

XXX I percent was if some maybe behind or inventory you're spacing better what there understand the really that give what color between of confused the so assumptions is at well at locations. just your and we XXX gross So to looking zones that just

Robert Anderson

XXX here weeks ago a that is going I'm I out reserves our this XXX David, a I'll we Robert. tell press think that you locations. couple of said we off when in -- pud put there's release memory

much XXX. puds. the So spaced wider that our It's at we’ve for that's on say spacing that I to I'm kind puds of compared eight wider than on that. what And mile about all absolute math is going wells wells obviously drilled across back there into much even XXX a our and means than you are think to do some to the could

Operator

Thank no for pass further concluding questions time, so to I'd are to there comments. additional this like Lodzinski you. the at It any over appears back floor Mr.

Frank Lodzinski

that thank The and calling. we'll answer available thank are, And comments always only questions concluding you, you with to shutdown. for we're

Operator

does you Ladies your time. thank may this disconnect your we Again teleconference. you. lines this Thank and participation and at you today's conclude gentlemen, for

Earthstone Energy (ESTE) 13 Mar 192018 Q4 Earnings call transcript