ESTE - Earnings call transcript Q4 2019

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Operator

Good morning and welcome to the 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.

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

Scott Thelander

welcome fourth and conference to you quarter our call. Thank

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

described in statements in certain www.earthstoneenergy.com. can section will Although Form XXXX. give no can uncertainties the reasonable yesterday, expectations, prove be as investor management to they believes to these statements are earnings are announcement correct. assumptions website documents our XX-K released we These and be and These that the our on risks based found they in annual report subject on of for assurance

or measures. more assumptions the measures these This in yesterday. conference to or of underlying GAAP are released actual may to materialize our references Reconciliations comparable most financial includes contained earnings directly risks these certain vary announcement should results one non-GAAP of call materially. measure incorrect, under prove financial Should non-GAAP also

recorded any information of call sensitive longer and on going by information section will Earthstone's accurate by available investor no of call time as of speaks note, website replay also today, thus March may please Also, replay. be the via webcast at anytime replay. only A XX, of XXXX this be today's to the telephone

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

upcoming Anderson. of our Mark Today's then discussion performance, regarding environment and and Anderson, and financial and begin Robert followed by call comments Lumpkin operations remarks from from with Lodzinski Robert Frank a from current matters

to I'll now Frank. the over turn call

Frank Lodzinski

I month. XXXX management take thanks Listen for and and of on the this this the our outlook and effect in XXXX, and joining commodity changes before with joining performance to that Scott, want address at everybody the everybody end declines sharp recent for I call. prices to address Thanks, will

Anderson take Executive CEO and Robert will Earthstone will announced, remain over a I As previously as with as Chairman.

not could more forward. ability leave Our to board Earthstone in Robert's have confidence and and staff going officers

of set you has executive technical financial. many multiple skill can proven and a that a and capable As dedicated including lead spans he our that has and disciplines who recognize, company he is

really with other methodically building despite outstanding enviable He's we're staff right and our now been are. market we along in position to the us instrumental our conditions keep in in Earthstone poor that one the

this Robert important me Many with well going of been and been as drill, have and through through that we're these first we're our do got staffs a XXXX very company, this of a when have XXXX, collapses. to Most and XXXX, thinking since I have to emphasize our many healthy of It's through started. downturn. this been number drill, particularly team done Robert's during XXXX we

and a be be will consolidator. will survivor We a we

And growth. on We long in significant survive while maintaining fundamental demonstrated value of pursuing efficiency. abandon turbulence, and volatility times every and of sheet, our the focus but continue control balance strength day constantly to We profitable strong the business term will we over term. with create that industry, present cost is not operational our to run and our in shareholders not for effectively only thrive dealing to long our a

adequate unfortunately XXXX, Robert through organically since and years great up to mergers. briefly scale We're many like similar competitors, not and too going costs or continue last made high a will our within that three build much mentioned end the of in value-enhancing to progress leverage. inventory, we've simply we'll in downturn

sacrifice and the simply our any equity we'll going entity major scale. but have work other to I of want bailout support to on and stress diligently for not we that complete the front, and board M&A we are balance sponsor, sheet our

Robert, the staff wrap We've couple over money call alignment, with structured up alignment other with to and always our and our the I turn midpoint the and or compensation equity our our of that through make our management incentives. I a want being at to be below shareholders. points, to Before packages

last incentives years, of we In modified couple peers. with relative to the values on performance-oriented be equity our our based

based $X in with we of target increases, levels. having for XXXX, stock awards enhanced average us shareholders order return requires base to in For further approximately of three price about equity over our best a our which per alignment XX% by share, an management of absolute realize years XX% on

are words, the our for aside more other incentivized more increase we also for The significant money price. In the to from we make that money we stock clearly have, make all, we motivation reputational ourselves. you

I'll that, to call over Robert. the turn With

Robert Anderson

thank current on of we continue team with and the and on I opportunity. and create this but as Thanks, also been board environment, and attending. us executive to tell you I discussion through guess through to employees by this this the the of staff morning, baptized listening the for go going and today in phone internet our forward. the team and you I how thank this Frank, we've for before will management going we're get rest value we'll fire and you

on to alignment building success all a a in maintain our company and our value clear our on shareholder role strengths in mentioned the result and standards I for strong be future our intend for well-positioned taking to CEO have that is prior solid the and is we here embedded strong continue stakeholders. progress XXXX you that I'm make and excited to performance. believe of Those direct happen Earthstone high and I culture and our created over build drove and foundation performance at standards focus of to are fundamental companies. the the here also that Earthstone,

of point I'll and few few cover out to want going. have where to want With we're that summary I fourth overview XXXX statistics said, our Mark have to and highlights take results, we annual but a progress. a I been quarter provide where let an our moments that

taxes ended we've increased EBITDAX XXX%, G&A we've and three BOE, by direct XX% increased our XXX% past per by cash adjusted lowered we've XX%. our XXXX, production our LOE the we've by lastly, excluding lowered our BOE in by year per Over period

We quite accomplish as pretty ended XXXX while low a debt market, today, adjusted than EBITDAX we maintaining not during with as of to bad a net X.X. this and maybe leverage volatile ratio less

effectively So, the pretty the moderate organization added even do with as that handle successful with three future. prior and last activity the incremental we built the boardroom field fantastic to downturns, intend over company our an in this better But years. in public deal continue We can Further major of from only entities, deal progression great a to costs.

be clear we're Frank our and is consolidator. abandon as to balance a Our fundamental our practices But mentioned, sheet. to intent not leverage over going

debt, environment of the use quality base capital we actually without along position positions with acceleration strong to curtail respond asset can Our plan. to hedge with seeing considerably, flexibility us the to and spending plans conservative approach leverage, our current our to of delever adjust we and if

price CapEx is growth comprised XX% a we January, five second free guidance changed, cash Obviously, of in out out assuming since liquid. inflecting $XX January, the compared oil the guidance commodity has a our Based expected This we a in production production of XXX plan, of of XXXX, range that to standpoint, not to of set environment From budget count price. midpoint the lower XX% XXXX BOE the flow our costs in million. oil, while on day on WTI existing only guidance but in XXXX, last XX% drastically XX,XXX to implied XX% and just put XXX that half days. service

standpoint, to going re-evaluating have the long-term in our we service practical next significant material are oil We plans From XXXX, no contracts. are prices. of absent curtail improvement a months and couple for in a we activity

wind minimum pretty and they our down XXXX and extensions informed just therefore no obligations, on commitments, we have all We our volume spending capital team drilling land quickly. negotiated our have me, can

will our XXXX accordingly, all the capital update materially. that communicate and but we going cut guidance in are So, our to we near-term

balance give to brief come you discuss and and now financial update. I a let call results, operations Mark the turn over I'll him and will back and our sheet

Mark Lumpkin

Robert. current in today Well, of with and a given liquidity balance just actually you, Thank the recap the sheet that on let's environment. start our focus

our we new on revolving credit with year, prior by in quarter little a our facility the of X.X approved XXXX. maturity same November of fourth that is agreement previously over credit as seniors So, last $XXX discussed, to respect borrowing years a facilities. as into base of enter in date initial which million did the extended the The facility

capacity. XXXX, facility, resulted which of the outstanding undrawn the we remaining million of a had credit under borrowings of XX, December million XXX XXX in borrowing As

focal the $XXX that of Additionally, a point, in in focused cash the absolutely current of resulting we're liquidity had liquidity million, as approximately environment, is we XX million. Obviously, and well. on balance full

to down what high across on scenario. kind is that figure will credit for expectation headroom that taking reduce our which it little expect going their like, banks not as our price the it's out granular, looks we really get the result would practice we and us extremely out a give like but early to While ample to any what industry, they decks, assume our looks of figure funding base of utilizations facility in too lending borrowing likely will

And context run few anywhere continued the prices capital would in to oil, say just I'll flat dour been for $XX don't irrespective come volatility programs strategy. particular a of given pricing assume covenant, in add recent have of the close the financial that in around any standpoint moves even hedge all what scenarios we you important commodity in in at running different imagine, our consider a to and we oil the to as could it's scenarios our prices. I we that capital of of also or commodity like assuming in impact and Well, past perpetuity. bunch from the days analysis, from

full just price strong guidance. after with $XX day the $X.X we've our XXXX of bringing WTI midpoint natural impactful, the decent of a We've our about continued gains commodity not year gas got fourth oil hedges issued attractive net quarter midpoint $XX the guidance of million. we in of hedge bit have swap XXXX, for $XX of production Mcf XXXX X,XXX have barrels previously a from approximately Similarly on price over million, differential at though the per realized XXXX previously a about of barrel also benefit of the XX% In as of XX% realized a per a and a for of to GAAP gains WAHA at production in as we well. of hedges released book

on from $XX that book and is degree decent our a approximately hedge prices we XXX% in prices These highlight hedge our the also mark-to-market us so as quantities and on downside we hedge of particularly have March of price associated side as oil three and experienced callers spreads. XXXX program such estimated level be other for to on put swaps, you significantly I Based to XXXX the million. with exposure hedging Xth, downside the levels insulate of as any in strategies the don't via would way or well. is

Okay.

Now lines XX,XXX of per cycle XX% natural barrels XX% approximately oil production and the revenues. gas the quarter $XX.X day revenues looking a our the and equivalent natural sales of quarter at the and and fourth XX% were decent and contributing to metrics exceed times, million with From reduce starting comprised quarter average by our a top-line, due bit with XX% we're oil, financial gas fourth fourth standpoint expectation oil execution liquids. of our efficiency for about

us For end barrels of our day, XX% XX,XXX this the an approximately at range. average XXXX per the above oil of guidance put was equivalent top of year, which

the prices a and on XX% per liquids quarter, for natural and increased $XX.XX were products quarter prices with realized all realized quarter-over-quarter prices for XX% natural per realized and In having Fourth prices natural prices terms gas respectively. price fourth of barrel. were realized gas basis three gas MCF per liquids our natural $X.XX by barrel, commodity were gas $XX.XX significantly increased

quarter. $XX.X net million. fourth a measures. non-GAAP the our $X.X per the of we quarter adjusted on $X.X for GAAP share $XX.X derivative adjusted or release Please We standpoint, and which share earnings or a million in loss of $X.XX reflected explanations measure recorded loss contracts reported From loss unrealized of income, impact per share, income of million non-GAAP fourth of reconciliations diluted the net an of for

sequential recorded increase of EBITDAX $XX.X which third fourth quarter. million XX% was the in We company a the adjusted a record quarter, from

For XX% a $XXX.X the full record of company year to million. adjusted EBITDAX grew

$X.XX G&A January On expense guided operating of cash equivalent, per targeted we the BOE in barrel our cash $X.XX and XXXX barrel side, equivalent, per per sub guidance the in release. per cost of in coming achieved of our $XX at we and XXXX combined expense oil towards midpoint lease oil

for our year $XXX expenditures totaled Our about approximately million, $XX or guidance. expenditures capital quarter full million the of resulting in capital fourth X% above

As adjustments to are will we continue to plan. Robert our mentioned, and evaluate capital

for really potential driven and As this in expect to fourth quarter by and is frack most it any and largely our our mid-February XX activity by the non-op to a beginning the first of the for the changes that the well spread the the quarter running we to completion spend to quarter. relates even occurred project capital quarter, prior on the plan, year first be really in largest

year second of our expect to speaking, been. capital down the occurred on we XXXX, standpoint, obviously we XXXX, that course the plan of quarter. be expected production what than with the dependent From the some flush middle end growth the experienced expect production sequential then be in which peaked the to much production a of first the versus ultimately And quarter the over Broadly capital smoother we the have decent of bit the loaded a to changes quarter is, XXXX we the the flat the what back of we fourth the course expect had And slope of we completions of beyond given do first but expectation that, prior the fourth of compared relatively around with side, the to in, quarter. really be production balance on curve. quarter curtailing year,

So, Robert. with that, turn it over I'll

Robert Anderson

Mark. Thanks

allowed in foot XXXX all achieving we by of combined And in reduced of our per start reduced XXXX. We our strides in out, and when from terrific performance. Company me generally to foot and contributed down costs from a completion let Mark $XX and team XXXX, levels did resulted the This lateral times over and drive a with online significantly saying drilling Okay, last costs to with G&A year to production EBITDAX some technical operations which approximately our pointed and BOE sooner. wells great more completions per $XXX service targeted per as job lateral great $X,XXX efficiency drilling sub record this LOE cycle and cash us got the to and lot had costs.

costs. proved and reduced on during in and In program momentum XXXX successful positioned reserves, and in a our Upton in XX on This which the XX% based project, performance re-evaluate X a current developed to We we year-over-year on drilling terms meaningful are prices a this a Basin into program on will on us project on our capital Upton Hammond rig of take reserves drilling we X expected In County drilling the plan has our unit just drilling pad operational finished our Ratliff County acreage. well program well May, basis. our proved us keeping which resulted has some is solely drilling year. increase focused completion in Permian with heading into XXXX,

In up were County, to on complete February, picked three the drilled as in in our wells XXXX. mentioned, WTG we frack spreads Reagan back projects that Mark

coming for these upon costs. based the completing our near-term wells, potential we online reductions activity With and in prices quarter, wells for will future these the forecasts completion in consider again second on delaying

wellhead County. as Spraberry would given mind counties With in as highest in only economics. B on up on and focus to areas Upton continue our oil A, Midland the return prices, the current and Camp we We Midland Lower Wolf this in well focusing in drill

operating of over drive helped In up some which average ended efficiencies. feet, lengths XX,XXX cost really XXXX, lateral we with

and with in acquisitions on trades those areas work shorter this efficiency lengths or to to increase laterals lateral to maintain continue in increase We areas.

been discussed the we've to the of our just drilled. not coming As densely past, our with acreage of most we previously projects, drilled. you that areas majority in are were position In has now back

and determine each view we as such, appropriate. individually As area spacing

and about reduced is X,XXX existing factors year our assumptions. some including about Upton same updated A counties from this whereas Generally, XXX same and the of into go prior wells reservoir between spaced County determination have pressure producers. Midland between that based on spacing and target. target, wells So, of lot and feet locations at feet quality, the we we've Reagan average rock the

can this assured So the time, to in summary, protect continue foremost that you during rest volatile practice our will first balance and sheet.

will pursue our with also discipline. financial We value-enhancing acquisition opportunities normal

to with years and economics acreage attractive provide inventory locations come. many drilling Our for

and cautious the in will we be capital near-term. However, utilizing

this oil for in We value. continue to build demonstrate margins expect during to look ability to peer-leading to price, our generate drop opportunities recent and

turn now With we will that, over it questions. operator, for

Operator

this time, [Operator question session. Dun question-and-answer Instructions] from come Our At you. your proceed Johnson be of with McIntosh Rice. questions. Thank of a conducting is line will Please we first the

Austin Aucoin

This morning quarter. good great congrats can first guys. just around say for any is, Dun. the want actually fourth in Hi, additional you XXXX I Austin is filling question And color to yet? provide if outlook on my a

Frank Lodzinski

of down couple We weeks no ratchet activity. long-term with definitely a it's can Well, commitments. a

However, operations, shut to a in pad. frack or hard a being a down of in drilling middle shut the it's middle little of a the down crew

updated a us program. give we'll weeks the well year with capital the as come on to and market production as So, the guidance, some the for both back few

Mark Lumpkin

and the activity. cut to some fair next We're going change pretty oil significant It's that, say few in prices to significantly weeks.

Austin Aucoin

guess, any do would makes sense. have be? idea And It rate XXXX decline the what I you then, corporate

Robert Anderson

like at is of range, that, XX-ish PDP year-over-year. new wells the that's to something the that XX%, Yes, year, in on look those whole the XX% and like percent bunch PDP wells, came our given of a wells what end

come kind as plan look numbers. for out to our we But exactly we'll production figure add with to out some continue capital again, the We adjusted year, balance back of that. wells to

Frank Lodzinski

is Frank This Dun. Lodzinski. Hey,

your through. bunch your teasing quickly us bit. fairly of our what as going I that we're folks, with will say time of associates know, Some we're up folks. me can bunch to a that, deck we you I'll long quickly. struggling over you gear and tell gear of been a a responses, that's Robert's our usual and a can little well as fairly We give exactly there, a you what And down My colleagues price do.

If at phased XX, 'IFRS you we look take a them.

we with phased had We've year, to frack at I pretty As running we for we rigs we we've of DUCs forward, ended the XX or up XX ever. and and had probably and a the rig, end of able quickly up recall, couple plan our crew. elements a out of frack, a were that's that the and cut going reach the it

So, color bit more there. a little you for

Austin Aucoin

to as you you wondering commodity price? the under then how leverage was was XXXX to times do ratio. change over -- wondering, I all And did that? XXXX? you change but a you expected said, activity, most assume X.X follow-up, How if I I a little you expect

Mark Lumpkin

Yes. significantly, honestly, it on the we math right based we I midpoint yes, is pretty guidance got production certainly, kind impact. guidance. now And activity, huge not going If because yes, the you're doesn't the pretty XX% a but activity assuming of hedges on mean, oil it's of cut curtailment significant matter, hedge some down. just position, of is we're the

it's we been probably percentage has a got, So, XX. higher

we fix delever. so on not just oil see we’re of because us while production isn't -- what we -- saw to So, big delever. for actually If got price some it's to we much a what all swaps impact that going activity, matters it the

Frank Lodzinski

I ain't up. think the going ratio

Austin Aucoin

to in M&A collapse? sheet the is, guess see final price I your And you any months. balance the with my guess XX this see question then, in XX activity I next Do we'll strong

Robert Anderson

that oil Well, given and probably we $XXX. done easier able when we're there, track the to in this, in our out than we've like things will times and are the sheet our balance and excited actually grow opportunities about be record past is

looking continue a lot luck to don’t opportunities, going be the but wish next I be anybody, going and to diligent So, XX opportunities at and bad we're I there's to think over on months.

Operator

of SunTrust. line comes the with questions. Neal question Please next your of Our Dingmann proceed from

Neal Dingmann

then to usually much on just one, Just non-op. because Robert, kind talked about? color how just I've second the as all a of is, that is, related one little you could financially you also activity all far what to my just release, two part, going that the do of as about talk the either sort you one get got advance scenarios would that how just question a there? bit that's on in wondering, on you number think kind much question or and operationally, non-consent I'm so more of

Robert Anderson

parties activity us, and some perspective of with had project have this forward is completed position thought well year. our discussions a that non-op about everything is this online, that else behind We've and couple We've a so got on having hold. XX going from and

we nothing face in staring material. the So, have anything but us

think parts? that answer does both I

Robert Anderson

Yes. of would nobody activity on And and lot in we before, whole really right I And add, progress activity a but nothing we just there's were expecting no, is expecting excited weren't now. either. drilling what non-op about even side the

Neal Dingmann

that's be on and could and you. pretty the XXXX trying one And the sort more Thank just I pretty converse were you about you're the I bit but be Rob, trend of still you positive? in of I versus depending on a -- a me if talk down just more you prices what mark? talking the these to make It like to in on sounds it, some rig talk either road detailed case, zero number had still can you'll know maybe you do, growth one, little know operated could decision just the number generate about on if confident, two you those definitely overall done, would one cash is both scenario. is

Robert Anderson

there's Yes, there. in your of question a lot modeling mean, I

our any we've year over want got of the this somewhat months, to the None difficult on cognizant prices and to last it of are. makes our gained doing we're same the go, it to is and time, thing be we've impact because where wherewithal. some just, has team well. of really rig XX So, on But financial philosophical to let is efficiencies a these our at fire

whenever continue our have great If mean, some inventory year and debt to sheet the we pay flow, shape. start a next back train it with the profitable don't sense. be to with run rig, balance I onto the going then prices of we growth prices. free we'll is jump a production cash or to in as improve it's makes under such down frack and of view But quickly growth idea wells all future to the

Operator

coming is with the line & Palmer. question proceed from Next of Noel Parks of Please questions. Coker your

Noel Parks

the wondering. in Sort is and wondering, just the in I'm sort certainly that strange I'm Arabia have of wondering been to something about just red service lines, We trade changed. a on with efficiency I checking your stability more service as that you off, seeing feel decision the Saudi the cuts, the case has keeping back I'm having needle see there's year in this and versus standoff or later you like look want could week, side they from in move the companies, of along same at just even was do your all running you the on on healing this world really Are to production capital. volatility? thinking Russia way? giveback and

Robert Anderson

sheets Those and storm strong this the probably who there's are Well, with balance are weather they guys. guys service can nervous definitely much less nervous. some like

they will jump a prices activity, prices our in because back sheet. because what are where of we They day the Our plan back of headed, may balance to view clear want cut probably to know when that guys, low them faster and do we every activity others, communicating than we is. see with recognize we're

or will keep come, all activity that between you guys balance saying, expect prices that. a but hey, reduce hand-in-hand I going, there's may if So we'll they costs

So, we to we're grow business sport, It's them to be every in and able communicating be stay need and with day. efficient. to them team a

go So, to if the team, players we take a we'll need pick know. point, to on we the and some at best breather

Mark Lumpkin

and couple and morning, we're whether that. came is thing who the panics sheet the to that cost changing know, of things long got want know and to not is an the kind and we we guys still Mark group I is have Earthstone weather for to the known it's a I Frank No, storm. again in, are, What one entities liquidity that, time here. and world balance exactly mean, it's add exactly have a knowing Monday in answers a you answers structure not we all what and that, are. we've the knowing the like what and hedges the rapidly all the do falls

in shock Honestly, looking and OPEC would they the lot downside ran thought changing when what Russia over demand few and is came scenarios knee jerk reaction some I the Monday than service coronavirus morning, costs or good overreact I months, have we new, changes when All still the they piece. look do to next don't next or don't on we the are know. thought. those better weather I and There's a things unknown very and know, weeks, and what few going we we're not a dynamics

the we're we're lot of and economic the is decision if for going have we and both as be do and go prudent things we're to to and go those it to else thing which cut the in encourage and say in corner about assess somebody all going real where private the sticks and going make But things about that was we do it that not change where cutting us. see going announced could industry back because wells we're along, drill changes a to changes, to how you talked even have we we to folks that, time measured to do to isn't want to see CapEx. encouraging It's but as oil people we're talked and making those that the to I

Noel Parks

would something you you the did about put CapEx? current say And that Company's

Mark Lumpkin

anecdotally, having doing we've say given conversation just what decisions quick I right and are making the now, in you're all guys the its and just about guys offices private public changes would seen. same their

Noel Parks

acquisition. outside out for to credit to let interest. spare what to if about them million wondering, to just those months, that few thinking on in out X, of earn return I it next for on of I'm who letting anyone DUCs just looking people situation ownership you depending thinking just XX pretty you're and some that sort other I'm conceivable parties an and line some might be in complete meaningful interest? be? usually, having as drill I'm And party XX, of about was think farm-in sort And thinking their your could to Is

Frank Lodzinski

million X, our you're XX I XX line. this don't know where credit on or getting

lot Our But sounding our cocky Noel, had that answer liquidities pockets. answer The Frank. we've always without is more our that. here, in we is the than to that, plans this are

just to deteriorate never did prices industry rapidly and commodity are You like the here. they the know how going

want you staff will down we probably look phase a us quarterly as at has reacted, how activity XXXX a now. we'll reviewing and we that our we in take to operations need is with with up gear and good and our If gauge forever, been

do they're holding and those will acreage completions, to things that's to get is try was opportunities anticipate an I'll being along shell drill control. independent shocked. under earn opportunities be their just I tell you question after think there XX to lines. years those to everybody there going anything But Your right And to to that. opportunities XX to is act now I not there,

going longer do. cases, probably we going be it's them think opportunities. do to I And than to Some take there's

like earn. in sheet. earn I that but acreage not at everybody's go our taking a positions not to up. been we're going draw or shell might is back with to our assets. non-cash shock drill we'll right In that's the Drilling moment said lines to as flowing time words, we're things it's my essentially thing one I see opportunities, to to we in earlier, our the be for will balance to sacrifice meaningful credit consider, but I take But other it on of something over think sort of mind some think and going So, going

Noel Parks

or mostly offsetting -- hold a In is as anybody down these that? issues And operating just current more. significant drill bit or to who’s folks as far on days area, the HBP drill little got you, your there

Mark Lumpkin

folks development in leases. than most I'd are of under clauses a say, part HBP most other continuous some for are that those status the

So, owners probably oil prices continuous activity drilling are leaseholders to $XX clauses. and lot attention activity, at new wells quite a has don't coming there be occur to could those hold want are, operators, mineral here also. But that of of they oil and some what because online paying

we've And pleased got couple areas a can we we're so, XXXX. extend comments, and I prepared that said that got negotiations this we like those obligation my week into done, in of

Operator

your with Gail is Our from next questions. line Proceed Stephens. coming of question the of Nicholson

Gail Nicholson

which good you for that in. side, 'XX. LOE fitting Good morning. as improvement guys you the BOE, quarter look on driving for you room down me right and to there's in had a In see job in potential you of XXXX at really a regards you really 'XX, posted perfectly when expenses, Thank expenses further the good fourth

Frank Lodzinski

prices did or bucks oil dropped XX Well, more. maybe so,

see think now work to what's them where bunch a figure Hey, we we prices much wells supplier, create So, but of we've every I chemical we got cheaper going on are. and will it and those to how come those further to little a got down and same operate new costs given be as and contractor day margins guys whether a out this it's going on concessions oil we're a there hyper-focused drilling our for some opportunities out activity, or even companies, even to on that, given made from

Mark Lumpkin

obviously fourth the And we Gail, the had production. quarter, first

BOE, cost will kind a there. potential performing service on obviously there downward this a some of in the think point, of big denominator provider the Robert's So, balance have pressure a from but X we activity, to we per there's year, that

Gail Nicholson

a This just just standpoint from had then always thinking hedging, of a this progressive have to 'XX? hedges And as regards are guys environment and a program. you hedge will phenomenal you year how in change. is like, you But Great. different about things

Robert Anderson

we have. thinking we about diligent on and at that go probably black forward. swan or for or Yes. putting We hedges we hedges knew we We're we want we have hedged but didn't considering could should was see it. this more be it, continue you event everything this If to whatever to to call as going options have that look happen,

Operator

line Bond from of question your Alliance of Please comes Andrew proceed Global with Partners. questions. Our next the

Andrew Bond

levels him calling BOE Bond of maintain Andrew to be the we Pavani. kind question thinking around CapEx XX,XXX is day? you about, production This what should per like morning. to of Bhakti is Good line first would if My want at

Mark Lumpkin

We're just not I we're Yes, ready that. in to come we've some idea. mean, time. out with still running real got scenarios

well us our so as but month the hedge there. in to just point disruption relates starting it give focal you of is we'll of as more down think I a terms decisions the and also economics, and or it to give back making activity right up, relates shutting on clarity

Andrew Bond

a preparing and And this are question then, being in any COVID-XX do company impacting now way? the you my see with operations as called you for this pandemic, situation your second how a

Mark Lumpkin

or absolutely work it discussions days work have pretty as the come who to is and have last necessary out we check who to person had the remotely be We the remotely vendor couple to had pretty pay ability into office. to person else is And to actually here a over is probably remotely. everybody work probably has the print has can and who of, the a only

a past worry the teams to don't quarantine the obviously, groups. self need week. in about field, operations And big we here in all going our the but in this remote, they today, after So, weekend of have that's being unfortunately, all for room group to us go are we're

Operator

instructions] with [Operator question Peter from question. the comes proceed The Ernst. your of Please line next

Unidentified Analyst

we're complete XX and you regarding that quick guidance year. up late that I the horizontal you I the last horizontal then A I question ask drilled was think just planning the I parts QX. that and Hamman completed again that call well vertically came earlier clarity know missed segments then on last thought I those wanted clarity, heard already? were those were in to I in part.

Robert Anderson

quite easy. It's Sure.

because we our Hammam and we Ratliff safe route took intermediate the there the surprise, and that went back and to some drilled drilled we're So, then is activity, frack now the section wells Ratliff. on offsetting had XX and wells

XXX wells. with wells what out timing that's rig rig. and out drilled, review and timing. there those of six the then the there's waiting over back wells both We're are all with drilling on we'll under again, right now, and do then And we'll that to of completion finish figure completion So, Ratliff

Unidentified Analyst

are the completion of the making Ratliff process So are capital now. Hamman in timing both to the subject for and decision you guys

Robert Anderson

right. That's

Operator

We the for closing question-and-answer remarks. over reached of have session. management the end I will to back call any now the turn

Frank Lodzinski

all and updating capital everything here we'll with day. to the and questions great asking shortly in that, like and Company. listening a everybody be Thanks your and you appreciate for we interest Have

Operator

conference. concludes This today's

a You may disconnect participation for and your time. your you have great lines this day. at Thank

Earthstone Energy (ESTE) 12 Mar 202019 Q4 Earnings call transcript