ESTE - Earnings call transcript Q3 2019

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Operator

Greetings, and welcome to the Earthstone Energy Third Quarter 2019 Earnings Conference Call. [Operator Instructions]

I would now like, to turn the conference over to our host Mark Lumpkin, Executive Vice President and Chief Financial Officer. Thank you.

You may begin.

Mark Lumpkin

to quarter, welcome call. and you, our conference third Thank

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

statements certain of quarterly will can risks underlying Although should give no can the prove be uncertainties, management expectations prove report be as the third reasonable to materialize they of described believes materially. incorrect to for the our assumptions these released documents actual in more earnings on These statements section Investors XXXX. Should are these correct. assumptions and on announcement These found www.earthstoneenergy.com. that XX-Q our or risks yesterday are they subject based quarter in assurance in may Form vary results website of or one we

by references non-GAAP in information our most this released includes under only on time-sensitive information contained directly are the also Investors the speaks call, at Also, please section GAAP yesterday. to as comparable today to X, call thus Reconciliations A replay. webcast conference going to financial no of earnings non-GAAP call measures via certain recorded This measure telephone by also XXXX of financial time these will longer of be note, measures. today's November website announcement accurate of of may any the replay replay. any be and available Earthstone's

announcement released about how to You those access our information can earnings on find yesterday.

Frank current followed upcoming an remarks and from from regarding by operations and financial remarks overview begin by with of Lodzinski; Frank call, from Anderson; with opening followed concluding will performance; me Lodzinski. matters remarks Robert by and our Today's

the turn to over now call Frank. I'll

Frank Lodzinski

Okay. this you you joining to for call. and everybody, Mark, thank Thank

very we third and to had Mark, well explain going solid some and detail moving very an into quarter excellent Robert, quarter fourth positioned a are and we As for are in XXXX.

progress substantial production constantly and improve continued We our are metrics. progress balance sheet strong strong our pleased very to with our

that and and cost our that management companies can Our and are be outstanding good a I scale. showing quite market operations company that small we competitive with with efficient operations. the greater actually have larger metrics believe

We continue to stronger on drive and ultimately our well shareholder to cost focus value. returns and both efficiencies operating operating efforts in

absence The Eagle acreage environment, expect possibly transactions very inventory mergers improve of or that for acquisition drill we and through economics. be a of to continue longer The increased in chase the locations laterals to wells smaller be our result XXXX in we will transaction but remain the Ford all complete we the acquisitions to Permian challenging longer significant laterals. and and that'll In continue accretive. in trades and

current commodity second current our based will our XXXX our flows the in of Finally prices during and exceed we forecast expectations operating capital expenditures on for our year. program X-rig that half operated cash

to it joining, your do We I'll appreciate turn over and now Robert.

Robert Anderson

everyone. and Frank, good morning Thanks

heavily weighted crew while is the third in were running completion As the Ford. the active we very to and rigs crew in a Basin a two program one the our running XXXX half. long stated, rig second year and capital completion Eagle Midland all We quarter in

Eagle completed wells. completed additional four As completions activity in three Basin. Ford and XX drilled started eight the and and wells a wells Midland we the four result we spud In on

brought third October. completed mid-State in quarter late in were Ford and Midland in County County online of completed well Basin Pen and TSRH the three Midland in also we being in in completed quarter online were seven completions process The during October. late included Reagan wells five brought over our as September Eagle subsequently the end were at as Ranch, the brought wells and in wells which quarter that on third project

are to the significant production quarter. contribution with of quarter wells from per of no XXXXX the at day BOE achieve brought third online end pleased the We new operated

driving the and wells factors impact to this larger-than-expected production the third quarters. downtime online came during production nonoperated from less performance Key prior are quarter compared that

Additionally rates late seen which production now September. Mid-state decline XX the lower-than-expected five have from online days producers. existing on we in over have our wells We of came

barrels and approximately of Wolfcamp with XX% The have A wells three per and intervals yet B pre-drill reached day in of rates our brought expectations. lateral zones XXXXX-foot XX-day and targeting B approximately wells XX-day peak peak in Upper were about laterals the oil oil which were unit rates our These October targeting line the cut. XXXXX-foot with average online with equivalent Lower in -- TSRH XXXX but producing B not Wolfcamp have are

third had of in interest to working we the during quarter Additionally gross XX% nonoperated we County. were wells meaningful three have brought online Howard which in XX%

XXX wells with two with and D the D. well IPXX the oil. Wolfcamp, has in peak XX with laterals us XXXX XX% BOE have day is approximately day wells peak well per one a wells a day per Wolfcamp These BOE and XX-day approximately which frame averaged oil. per XX% has fantastic with This The a this XXXXX-foot time well The BOE rates now all target online are well. targeting achieved XXXX two A of achieved XX% Wolfcamp first approximately for oil A been averaging days over Wolfcamp for

are these well results So also. with we pleased

inventory of the continued of and from County we our Howard result the successful wells Wolfcamp had now on a we A drilling year-end. some Wolfcamp D acreage this have in As success at expect expansion

densely prior and addressing depletion and not that advised that potential was we have You parent-child may we in drilled acreage issues. proactively were our calls recall

already to the impact with making pleased progress and the optimally understanding This XXXX we wider are production a areas wells We same on zone approximately we drilled in our adjustments how spacing at feet. certain space did develop this well evident block we this landing at acreage year made XXX position. of our particularly have with regards TSRH approximately to previously is in are compared initial to in the which results at of which were our wells between recent bit feet

at TSRH and about wells. provide year-end XXXX of results as probably additional the XX looked get days we only And than will information. better initial some to granted is we this Our production

adjusting, spacing early of By we and believe we our in the development life maximize the will project economics.

planning. intentionally to operations. You note have bit order historically should little our we spacing on A that in locations at conservative undeveloped our wider spaced development be in proved

end operate the we the of efficiency is deployed older perform in and the well rig expected one continuing released the we rigs of two rig continuing third drive gains. The and high-spec Basin rig June. to is letting our push at to As Midland in go the quarter working newer of supporting our to legacy

to drilled last continue averaged County. XXXXX-foot in per and Reagan over XX target well normalized We lateral have days XX days XXXXX-foot wells laterals to the XX per a

all fracking of our days finished expect wells that recently the remaining we XXXX have to crew for the schedule We have around by of ahead Basin these and XX had year. planned released of six Midland end the online frac and wells

we beginning wells. day. achieved per a per couple while X.X did completion stages months fracking per were at to per by Over where cost end over the stages of a about XX.X XX dropping days the these the job past at XX went averaging stages day We We our great actually stage team from our day few X%.

our mentioned acreage working year lengthen our this we efficiency will As economics. average to lengths and acquisitions on laterals to lateral Frank, constantly enhance are XXXX complement keep well-level are land September XXXXX trades feet our toward a our The distance. operating which over increase and of going lateral program to drilling be and in trade who positively accomplished will our impact lengths team this which

we gross X.X in October. net were On the brought Midland County in wells that nonoperated online two side have

quarter an third wells online additional project. to Davis Pen XX-well X-well We which in project brought County is the additional ran during beginning continuing our In be the Ford December also three our Drilling to Ranch four on first of in the or And one completions October. of we with are and non-operated in either the the participate throughout late finished year of seven we finished in Pen Ranch a spudded wells rig Martin Eagle XXXX. project. all on this quarter on we expected drilling East wells activity

recently by year-end. started online on to the We completion have activity Davis just three be them expect East and wells

just let commentary Lastly give me on levels and some our production brief commodity mix.

a guidance XXXXX average As XXXXX we these with XXXXX August fourth you to our at to XXXXX had production increased day. over day of the increased BOE exit With in quarter activity top rate BOE per XXXXX expect new in from that the end be production little the know XX% on we and mix all per of to provided production the level wells and year-to-date oil higher to BOE range our the in bit a XX% than current beginning per day the we to of NGLs but of the continued new side to have this little Year-to-date ultimately mix existing near expect with online. forecast XX% oil Further August. year-to-date all year. the rate our be perhaps wells commodity with our from hold better coming these somewhere gas we

is the percentage and oil oil likely all performing expected these on new under as on volumes the our wells. are our year to producers for Although be existing guidance both

I'll turn that, With Mark. it to

Mark Lumpkin

you, Robert. Thank

XXXX. third our with start the me Let financial of metrics for quarter

realizations hedge million $XX.X does quarter our the quarter mix Crude natural were $XX.X for the contributed during XX% oil the gas. XX% natural XX% of production million. impact total liquids oil or XX% gas not revenues Our and of sales revenues and which include was

at oil a equated In prices of realized held realized terms price XX% commodity which barrel. per steady $XX.XX of our of pricing NYMEX to

from Mcf. NYMEX a to second improved prices pressured prices NYMEX of the realized per barrel in as NYMEX realized realized the in of price of oil XX% versus price resulting XX% or $X.XX liquids of quarter. approximately gas XX% we NYMEX of realizations gas per Natural of $XX.XX remain quarter-over-quarter Natural prices X%

$X.X hedge commodity to to gains in our year in of have strong million. book the continued gains We from with third for quarter realized a bringing $XX.X XXXX the benefit hedge approximately million realized

for remains of and strong quarter fourth approximately of production full XX% the Our for hedge guidance and year midpoint gas XXXX to the position XX% respectively. our equating natural with of oil hedge

WTI oil our added. average now and at both swaps We with XXXX to have day net position continued, barrel. some Mid-Cush hedged hedge an incremental approximately per to oil price In basis of $XX add have on XXXX barrels per of we

per XXXX an of $XX.X in generated side in average now including well per hedges $XX.X and We million adjusted adjusted have hedges an GAAP moderate a adjusted can of in gas on share WAHA net also at From, $XX are through $X.XX or presentation. reported or details our diluted $XX.X natural of commodity current both income We on hedge basis per million XXXX of the investor underlying level for basis. income Full quarter. share. the on our we of be approximately barrel. Similarly we income price recorded found third position EBITDAX and $X.XX net standpoint diluted adjusted the million hedged

or interest or which diluted GAAP controlling a of we Additionally to associated essentially the Accordingly perspective Earthstone A reflects requires Inc. amount the income million shares. GAAP to net loss from us attributable $XX.X share. reported $X.XX disclose Class per with net Energy income of our

refer can You for release XX-Q information. yesterday's and also further earnings to our

down of an expenses costs both the reduced per and $X.X the oil basis compared barrel average Now quarter operating $X.X to of was leading G&A equivalent lease dollar we our LOE a and reasons. was of $X.XX barrel both line quarter and on quarter absolute quarter second second in second million with looking third at the our per million versus, which cash we on in basis. our as expense an from more Total in cost $X.XX the down which was $X.XX in the in elevated of of a expectations noncontrollable variety first equivalent from discussed This previously oil quarter. second for the quarter LOE LOE was to

second the G&A oil cash million G&A down expense second third the in of in down and total the average cash per equivalent in of leading from $X.X of quarter. first Our $X.X $X.XX million an the $X.XX quarter, from quarter was barrel of $X.XX in quarter to

little cost the on give, color further a me Let side.

quarter full G&A, year quarter On and that per equivalent tends quarter to our BOE. $X.XX highest cash the quarter $X.XX G&A G&A note the range cash we I to our unit tends barrel be of below of our third to be cost fourth lowest are $X with would of guidance year-to-date oil running cash per historically.

we So nearly of and cash with $XX.XX you target models. just managing And mind cost LOE. we we third per cost expect to continue quarter as combined barrel But hit that BOE. in and G&A do LOE G&A sub-$XX keep per the your adjust continue and that tightly to in of cash

on to the little capital bit let turn me now a expenditures. cost side more Continuing

was quarter to approximately fourth million $XX capital the million for the quarter third capital the full the for quarter with for quarter. million year approximately the year-to-date in bringing us accrued expected $XXX to million As our capital highest compares our expenditures expenditures expenditures third year implies $XXX through $XX which accrued of approximately of guidance of This quarter.

are and don't you the We for for all. have year updated million targeting $XXX still any guidance

A couple of move higher that year. for bit could number a that things the

our drilling in position ahead running efficient. in be rig drill is we fourth the likely side First are additional of the with a our high-spec will bit being operationally versus quarter embedded newer little in And a very some what things guidance. wells on to we

not XX-well tunnel start late commences quarter out our of were and occur question the fourth control CapEx in course in of it within it's that quarter. the assumes as current completion if nonoperated but but fourth the project Second the completion additional would XXXX activity our in partner could require our out that activity of guidance to

in drilling and capital upward in previously seeing movement than completions CapEx we that are costs lower had And this is the offset to our forecast. potential we

of million of to the over borrowing liquidity. $XXX Lastly had balance and outstanding million. of credit borrowings quarter let's million our for million At with move XX $XXX September cash we we base sheet approximately facility $XX a the of capacity undrawn ended total balance $XXX of under liquidity of to a with million and plus cash the $XXX therefore million close XXXX $XX

expect drilling increase a high the lower liquidity result working deficit the quarter end. over worked capital over down a timing cognizant by activities to bit increasing really be anticipated quarter-over-quarter deficit you $XXX of is a most We coming necessary strong. I'm remain year-end. our and this bit than completion based balance and to largely of had activity our of months and credit So million of we the would our to bit process in and draw-ins continues that on level had as little a our good is bit and this on facility working capital a the

that With to Frank closing over will I for remarks. turn

Frank Lodzinski

Okay. continue drilling with of this Look schedule. activity strength lower as completion cost Thanks on and demonstrate our and capabilities we Mark. we morning ahead to described and our operational being

in We quarter and to the are into continue to We positioned and intend for to meaningful heading production ability growth wellhead our fourth demonstrate XXXX. increase economics returns. generate peer-leading

focusing things control day-to-day our to that addition executing and pursue on would operating value continue a those can higher. that we shareholder activities M&A basis drive on actively accretive strategies In we to

are major board to to execute we or footprint. the a acquisition to sheet. sacrifice our right Our Without we and strong across our us liquidity right the logjam provide the for with sheet but team that skills balance break We we strong have a and evaluate ability doubt believe the merger. need just balance to expand out there us or not the overpay going

that our they'd outstanding with we to drive acquired operate effectively We ability an team on Plus develop we and newly continue existing have attractive to enhance before. be assets have returns exploit done to before. and we existing ones. have efficiently Also that will assets. proven meantime the assets In whether or done

consistency off go of script open one going a is activity you and and earnings. the and measures have just and up I'm line address completions all that as spending of to or of yesterday issue financial Before matter that an in you brought one bit EBITDAX I -- questions a such that all

X-rig generation in a our provides us for growth latter currently to profitable we and of As opportunity to expenditures an free in XXXX year. capital constant this reaching the revert project over we advised cash program year have part the

the production and However That efficiency returns the it's the as we will market -- and advantages. possible efficiency be reported best at throughout to as and that keep structure to to increase quarter-to-quarter we to highly multiple do but to to year. our continue and maximum efficiency as time. costs wells have appropriately we cost from impact hard our to advised. get activities reduce and that work complete one Nevertheless consistent the we important impact maximize could Again to intend

now and listening will questions. for your we take Thanks

Operator

Thank your question Our state you. Please from SunTrust. with question. first Dingmann [Operator comes Instructions] Neal

Neal Dingmann

Good morning, appreciate the time.

might more about the this I Robert think guess I'm year-end? my of -- this you drill on And question drilling you first to probably is could for wells XXXX what might many maybe. early speak early comments talk Mark's for ahead kind additional running at Could enabled maybe what operations? the more imply looking with particularly about impact you recent is you're I you that before imply? just currently how

Robert Anderson

the in some pad the we happen won't the this efficiency just Neal until bringing ahead like out of through have XXXX of we won't it's going with pretty ended done year-end be probably it the drilling in that so. and of go as we a know I'll fracs more probably will what's CapEx to because in month a phase likely we -- year why and costs ultimate don't the -- in or coming so It's wells in they a couple wells And a driving plan. and wells happens change I that's get of of kind which next wells there down we have will December. here of we we going get what of this Frank But before is end down. to if order. because that have materially therefore to to It much non-op and frac online. all actually reverse operational end-weighted impact couple will up it terms back drive the queue the because on to have And wells stated of that started just in think group bill least at online

Neal Dingmann

not Got EnCap probably it. had filed then but couldn't it. for only of And notice just with you help there? around with I'm a about Got that? owners implication but Or your thoughts talk your if one one with that wondering a you follow-up my their just all XXD Frank is Frank. second just companies. portfolio I any large of other there with could some And

Frank Lodzinski

Sure.

about they EnCap -- one involvement. And and equity the filed companies look of them a talking to with position. for with with management an equity full have So filing disclosure I where just the Board shareholder we are largest they've course are EnCap think and sizable our of the the shareholder public all value. you're one of Look and XXD provide focused on maximizing the along is that market course our

So to them to where value. shareholder we it's legalities see always are just talking and Board really our and opportunities about we increase

that. than So it's more nothing

Neal Dingmann

the good. Very both. clarification Appreciate on

Operator

Brad question next Our RBC comes Heffern your state from Capital. question. Please with

Brad Heffern

everyone. good Hi, morning,

think I for Robert. maybe

you During Ford investor you think between the the said for at an of commentary about to Permian? economics also you and your continuing balance M&A Eagle I'm acquisition you potentially as the Eagle Ford then sort Permian how curious just talked about well. look acquisitions versus of doing preference

Robert Anderson

are have both capital like opportunistic. areas. the good it's rock Good, a It's and we has economics two we probably somewhat between places in allocation having -- not

spending one the are going asset of right combination the to time it's And at Midland answer We PDP in drive opportunities and and Basin rock little in and Ford looking we opportunity can the bit sort whether running we we a are room are base let in find are the a bit other there. then or Eagle we if the more agnostic. But the for time looking the spending opportunities. little of right

Brad Heffern

'XX? mentioned And guys it. is you sort down coming is Permian frac then, When that line crew. the look laid Got have of in back? cadence turning half of the what And Okay. you the first

Robert Anderson

Yes.

We are still putting that all together.

tweak a got a have I to we got some have that little think but bit. schedule We room

some the January year. first later of more in break fracs then point -- But in done end take this of it's half do kind schedule time right have still could preliminary the we in and and frame is the at the So the then up of February we air. some now another

schedule. We have like us to it don't not have to working we on now. It's tune together got and the them. trying the frac just fine It's company access

Mark Lumpkin

I Brad And just would add.

mean bit done could you we that realistically terms I the get of Rob to typically In fracking internal some when frac of a between what when know referring of there's is you As a delay line. is

how about to days. add would model If to you're I that XX thinking XX

Brad Heffern

Okay. Got And then one clarification. it. just

the the So pad spacing. about on TSRH talked wider you

I end said feet XXXX you zone. think

from to feet verify the lower eye be So And XXX? correct? that in a bird's like upper XXXX in there that would the just Is apart. view just hand

Robert Anderson

feet about XXX actually are way the There is Brad. think Yes. between wells to it

Brad Heffern

Yes.

math. Sorry I just can't do

Robert Anderson

whatever what talking I you same XXX.X? wells total. the XXX about. wells It's were XXXX knew, wells and not. No between No. is done XXX.X bench. Yes Old benches between Yes. were that in between in XXX so at it's

in side pad on the mind side western wells far that the far eastern are on the drilled the TSRH keep of that acreage older position versus position. So apart XXXX our feet just of we is

put we this give down good so to really spacing. ourselves a view test of And

Brad Heffern

Thanks. call. the appreciate Okay,

Operator

Our next Northland Please Jeff Markets. state comes question. question Grampp Capital your with from

Jeff Grampp

to need about the for accomplish just what here think a at costs near-medium the for to bridges kind your target set XXXX relative get tracking achievable term? I'm of do that of is how are of that or If kind going to to XX just And you costs. see operationally all looking kind last in What of DC&E guys of foot? they to wondering target? $XX and kind that And slide about expectations kind

Robert Anderson

question, Yes, that's a good Jeff.

that will this is completed they very then a well drilled And each year pad. five per top And single wells with all And on two either were wells most is -- activity will So get helpful the pads for the two more that of is completion wells of maybe capital or less on plan drilling year of three or side five six we XXXX efficient then pad. the what drives pads, our number and really has four, per this or efficiency year's and three that. be. us XXXX and and than three,

So That that up momentum next also down. Probably the length to lateral as of drives is of one longer drilling continue is keep we the keys. one the laterals.

those drilled we two County a The that in where over and had have wells cost. our so the couple three So going Reagan the in be at XX target down well drive to pad two really pads wells of last or are or a we right probably under target combination we and those were pads.

we to cost by down that the So efficiency. continuing drive are

Jeff Grampp

Got to to switching operating in ramp a the And, it. Great side. LOE But trend quarters maybe on be we seeing. about on a prepared cost to trying of impending kind you this the hear. few over should we how the of given handle remarks. the Mark, bit better kind in should And get next little just think touched production that,

Mark Lumpkin

add like one. up that pick to. he'd if I'll can Robert Maybe, on Sure.

of on we bit to guidance. step fourth improve. a BOE up bit of kind feel range And, the on are cost should the number of with that obviously a gave -- while we LOE would we we still and So up like coming got would expect from production incremental with in go that expect the metric quarter wells online total per kind absolute the basis We change have we a levels.

So nothing really than drastically different that.

year. for next point I terrible that's starting think not a probably

it's lower going also for $X.XX year. have that right range are we bit a than next or $X But of this guidance now So, volume we either. it's with the hit not additional to year probably modeling

Frank Lodzinski

them $X. get to This Jeff walk closer is here to I got Frank. this every is and Frank. we in down tell day

working that. keep So we will on

Jeff Grampp

guys. good. the Sounds I time appreciate

Operator

Capital. comes question next Our question. Imperial your Please state with Wangler Jason from

Jason Wangler

morning. are side. any Good maybe of focused lower? on that. LOE guys talk that obviously things should that with help about the higher you certain following there production Maybe are kind drive up on But that -- just to Can you

Robert Anderson

Jason, is Yes this Robert.

you assets over had of program. run bunch really chemical We the these good on we One the corrosion. then that breaking a for time. expect is scale for all of took things our of new period We we things as older be in we do get And can of our things like treating chemical XXXX. And focused with are wells start a we a would is proactive one and about program when down.

have the Winter expensive through trying to Yes, for a program. in we So, our every time winter in office just does that and most the team little will group with the we from figure is Midland But field to and more best though standpoint in the a problems guys again some having there. day chemical Basin or field that a we try handle got out chemical bit keep a down. are working work cost even part. create the

So on the now for thing that's biggest right us is looking forward our chemical program.

Frank Lodzinski

your essentially you so on don't and often And longer have tubing as Which, over on. and run pull to you gives time of so times. course

a all or three or just that it to years adds but get having months swap for every and two XX try I'm instead replace So there. of something all pull to that you up to well making out a few joints once -- purposes this you in working years, illustrative and

Second in are the day step BOE and that office for field XXXXX linear your and thing costs we variables not is a really and variables. are in built field costs your the or office

the You the sure have and got you so infrastructure people on. systems the to make

to the I'm So why the at or trying $X in down harping prior going as to companies or see course year. and I even we on below to get over think least, I'm thing we closer do -- that's that hoping next are of

done like day working in it Just prior we on keep on have entities. every

Jason Wangler

difference of you Eagle kind you of of compare two Permian availability specific about appreciate out you've deals landscapes forward? stay obviously don't looking and talk but a Just there as how kind -- I there And know can out there? color. the looking M&A price be you the maybe significant how even kind but outside as is obviously Ford of and out contrast the as mentioned as been as you then you Frank, I well that of

Frank Lodzinski

Well, I mentioned the logjam.

bit think there's much want I clearly think our when some difference right deals. we buyer for and still too to a to to don't companies don't -- talking I use of out we our seller quite that there. you're and over-lever we equity Clearly the the but use will of private of want equity

in it's to when private PE different. you're companies not of that it's difficult or I'm firms. context so very So any portfolio talking very, companies sure, that

a and you company and the company more if potential. is little have folks you putting Eagle thing. probably stacked you Basin other or together makes guys on but prouder of public-to-public better key real And than are chance of the key other Permian capacity other to If consider Permian stand a an a the it are Ford a sense bit analysts on the your here because even

have you mutual management issues, and in valuations public-to-public: so old social on. equations same the But

the on the the that's one hand even You two count can And probably hands amount companies of maybe of landscape out there. amount public now. that public are -- right

Neal's past talking we not are where And we surviving about difficult the shareholder -- are up to in the done return people. in it's So done the And question have are surviving have but out company. we mergers bring where there previous we all the time Jason the we company. mergers are we past to

of we and that value are consider of shareholder are perspective all to going continue the to So from shareholders. building we

meaningful us. to that's So,

don't I know. So

Jason Wangler

Thant's you. helpful, thank

Operator

Capital. question. White next with comes your state Please Our John Roth question from

John White

practices drilling whether your On -- or really well significant Congratulations are to nonoperated or Difficulty] Howard you. during quarter. were in operated there big thank that wells highlight? County changes other any Wolfcamp the quarter and like the drilled A there that in completion was any Hi, you'd the [Technical on

Robert Anderson

is John. This Robert. Thanks

operated the of water But side by gained or looking same generally standpoint some and say that from with have like it be. not frac tweaks A at direct things. And on Wolfcamp proprietary. used maybe using different per our it's there's stuff do been recipe like barrels us than fracked not any impact the it that pounds of our was the call of we well We different sand to -- that a won't and is well. making might our between maybe something nonoperator are an foot efficiency our It that but had of recipe I'll on minor that. is recipe whatever a XXX have trying same that we just constantly that other XXXX we some on little necessarily a I It's companies some that

just we So there and got knew good rock good we had we results.

John White

your pays off. Well tweaking

for So taking question. a thanks keep it. at And

Robert Anderson

bet. You

Operator

Palmer. [Operator from Instructions] with question. your Our Parks question next Noel Coker Please & comes state

Noel Parks

Hi, good morning.

Frank Lodzinski

Noel. morning Good

Noel Parks

check when would talk in things just of about as to the of going same are the speed I'm a can question running still But other past is achieving as rig. and you a -- ask facilities you costs so reality built I of Frank piece the the benefits in neighborhood one gave really covering cost example scale course forth and just about of the service and advantages how ones. but from -- think in and down and efficiency what most scale of overhead as day or a being just do puzzle people goes improve of Certainly terms that have offices I you're to here? with just that of the a some XXXXX single guess -- we barrels is you're and with learn far overhead come the speed

deal kind here? you get the from what's So harvested be opportunity bigger of if did to a good

Frank Lodzinski

have look that on as down No at on. here And one in is all prior worked BOE time. this know from any I and do we public operating something the it's in completion per cost that thing. companies think G&A what and in and so terms and cost don't cost always we one of we prior and you companies driving drilling look Well,

cost. out all working there say this they the have where people. back job understand management sound meet sideways. bottom-up drilling corny and I with And activities. come that your on out go completion we LOE I good field with absolute from years the mean over were and and the team here the think done look and and may new pat trick is we the more focus we you all of what and the then you install in can board clearly can the Midland them for And down and you top-down software to facets Robert doing some together across you just and so improvements drive the I continue a and but being you at Basin this the

across the really it's So of all them. board in

lose there The XX for I'm XXX of on even on field so communications with our you're you infrastructure be if XXXXX? away. to add achieve day senior -- kind are not costs and infrastructure the the or very of BOE to just location purposes a XXXXX office lot cost. the the from exit on. tend with of that miles say our and got to the XXXXX at are between But illustrative incur going those so can little watching go think group will just to or folks we rate's No. up our fixed some field And XX you that's lot XXXXX I ramp that this field run just rigs making our a of have etc. fixed folks to and once Now, next these conceptual and the people XXXXX you so a I built that away I'm add or XXX proud in people the costs biggest so have that out in bit you stuff have that fracking and Internet don't wells in We XXXXX miles the are or -- to years do going to much have more variable then to -- infrastructure and me people been we the officers we more for thing illustrative a is same

at one there's It's it So all. no thing. looking

of So it's saying long-winded way everything.

Noel Parks

days sand as material there that improvement it there Is costs any water but they're just to in and be example still on sand Well long side? like availability Right. handling seems on made like maybe rearview don't know ago. big wasn't I Is the the it side? the an when the Or Seem preoccupation. anything all would mirror so far you a were say?

Robert Anderson

you Robert. your is business. pricing discount. have -- running degree this Noel, scale Because facets it would With a right? that definitely rigs therefore bigger some power you beneficial all you get some weather of could multiple Whatever would and it to have be. might be Well cover more And pipe

we -- a quarter if to add is related had other less somewhere talked it can a well-to-well hit wouldn't more we more efficient. would on The impact and is -- in to with frac thing we we focus we and do. that and had focus more Frank activity to ours OK more downtime if the on brought consistent would from be quarter-to-quarter wells little have on else we is you and early guys it individual probably XX of probably being which wouldn't focused And kind scale what very along life your consistency. what are that be And about trying easier scale. make goes more if We

can As small as very we are be we efficient.

that be scale we I consistency would even about it and over have and have over think from and we with better standpoint. it talked growth proven But again. that

Noel Parks

that on assets in that their if of reduce the private feasible? ownership us. thing. to can't let they kind taking to order go operating opportunities Anything of environment. maybe of but of current a letting of just, valuation remind that with companies on type last sort sort in the the like teams them and the get please Okay. And farm-in where folks about Talking One is

Robert Anderson

don't are some is. not right probably and get all sell it. where several to going And on to whomever public their things private we acreage. different is it the operator to probably there's is you're It they opportunities want And and working

And that have So to things as on it? well structure there do we into we on could a our at board. some we particular way is the farm-in way structured earn are looking

Noel Parks

all for me. that's thanks, Great.

Operator

and back questions turn further to no, there Ladies, are at this management time. I'll for remarks. some closing gentlemen floor, the

Frank Lodzinski

all we better. thank months here do about Thank hope to few Well, quarter to good is equally be we in fourth say, the you have telling you. you and, or a

Operator

Thank conference. disconnect. a you. day. This great may parties today's Have All concludes

Earthstone Energy (ESTE) 10 Nov 192019 Q3 Earnings call transcript