Earnings call transcript Q3 2022

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Operator

Good morning, and welcome to Earthstone Energy's Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded.

Joining us today from Earthstone are Rob Anderson, President and Chief Executive Officer; Mark Lumpkin, Executive Vice President and Chief Financial Officer; Steve Collins, Executive Vice President and Chief Operating Officer; Scott Thelander, Vice President of Finance; and Clay Jeansonne, Director of Investor Relations.

Mr. Jeansonne, you may begin.

Clay Jeansonne

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

federal to get statements that of started, we remind within law. I'd meaning forward-looking Before contain like you will today's the securities call

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

financial be any to please our earnings information directly This comparable of in GAAP contained today, conference yesterday. most call are these non-GAAP Therefore, measure the references also only under note may certain this announcement as replay recorded financial measures. X, to of time XXXX. no transcript information speaks November of the reading. on call accurate longer includes any measures Also, or non-GAAP at issued Reconciliations time-sensitive listening

followed and have Mark call remarks from Lumpkin, will President we'll from and Anderson, Steve CEO; CFO, then comments some Robert. by Today's Collins, begin comments COO; our with from our closing our and Robert

Robert. I'll over now turn to call the

Robert Anderson

him and one little and bit on time I'm to and us of he got out tonight. a we've good glad sure listen because of web. join the I'm our morning good of most today. hoarse Clay, to you the And town more taking game it's Thank call call or I'm joined on Clay. left everyone Astros for a the the few Thanks, know, to months ago, here, have you

a started. closed frame, from very we we to how such X continue in short time proud have Earthstone in acquisitions benefits last the get Let's and quarters. we the I'm of the X have transformed see

Our have substantial the with company Permian footprint in Basin. in an shareholders has investment an provided efforts that and our targeted entity materially operating repositioned consolidation a the

exceeded I'm yesterday. I to for incredibly our approximately workforce third we work operational that and added I'm cash their financial and our top that production free as income, range reached the BOE strong adjusted net and of day XXX,XXX flow. proud and over of dedication, in outstanding levels end strong guidance well our This hard team, September. EBITDAX includes us enabled want per and by pleased to quarter record-setting And thank which the of record X% levels report financial we announced recently the as - performance to existing adjusted report

day, XX rates will above a the accumulated. quality the strength assisted for Steve in you Our BOE asset with which our The of the bit. detail the it low outperformance base primarily this the of the third all But we highlights synergy driven our in our in overall quality from acquisitions, results in highlights initiatives quarter XX existing greater have asset with development asset oil outperformance. program, continued by and have along quarter sure recent targeted from our declining inventory well discuss our inventory large, of when success also base. brought cost X,XXX wells per was online

pleased Texas. committed the the and acquisition. on to Stateline to I'm are we our New these We remain the trend closed the commitments. and assets, those strengthening and And of accretive As Titus continued company's Basin, this delivered integration you'll recall, capital with this we of we continuing Mexico immediately acquisition on Northern with Delaware particularly August in contributed discipline the XX they assets area the balance quarter. while of results sheet, including

During Year-to-date, have And million cash this year $XXX this and over you over flow. free will a recall we we only million of these acquisitions. year, closed free the in cash generated X of all generated so quarter, that August, which for February, includes April acquisitions flow. $XXX partial

allowed about Our when debt, pay quarter the resulted significant X.Xx which continued third by of EBITDAX. generation Mark in sheet shortly of deliver substantial of using will our amount the end our here balance promise on at adjusted achieving of quarter leverage the of ratio free and a of cash us down to address strengthening flow a annualized

In free ownership position not we the portion time share common cash Class Pincus million the proactively our with closing at opportunistic We presented Warburg at a flow, shares were outstanding early opportunity while in a a a liquidity. repurchased unique view total of of A price. as same The to by X repurchase growing decreasing trading have count October, highly company. stock repurchased accretive shares discount reduced the X%. of this use our to We

debt, our other that sheet provide that well our for the cash will effort, generation as In substantial top to we our optimal of opportunities as the balance of continue strength flow remains focus on free return support The Earthstone. evaluating priority reducing shareholders. in investing for our

we of view options have play into how move will better out as We a expect XXXX. to these

drive appropriate. we asset overall We are execute are our corporate, deliberate scale. not to and down interested our leveraging be will clear, as simply development and strategy continue operating we expanded in consolidation To costs, position to growing

focused that will and Our shareholders. growth efforts profitable on have remain our benefits been to continue

increasing is date the flow, and inventory build of drilling locations; X, consolidation strategically expanding sustainable return shareholders. footprint; all on: X, In our perhaps and created short, of free of strategy with our growth which continuing operational will importantly, have our X, rate foundation to to high in our we cash focused most benefit our upon

an to update. to Now Steve I'll provide turn the call over

Steven Collins

morning, Good everyone. Robert. Thanks,

and thank for wells. their the them third drilling and want operational another tireless The was quarter to we of as of opportunities high to the efforts on on our outstanding to of execute rate return footprint for quarter I continue all cost expanded operations reduce group,

We continue on in and assets. in X that additional be quarter, Delaware We focus rig first Midland activity our pad County. Northern added newly be Its rigs running Delaware to Basin. Basin on Canyon third active Chisholm an Titus will Eddy the the in focused recently very and acquired dark will the drilling

wells. addition, Midland In frac The the in teams operations in Delaware underway third XX have the the XX in we both completed put and quarter and Basins. wells also

assembled with economic drilling locations. base Our future focused high-quality a of very asset strategy a has acquisition deep derisked inventory

operations for during our some great record the wells, exceeded mentioned, team in brought helped of quarter, production cases, or expectations, online have which levels Earthstone. reach Robert our us met As many

shown have result our areas on We which is X website. Page corporate the of our updated available that presentation, on

with cut. BOE on and Second from average Lonesome wells to Titus, X we Bone our County The the per the Basin, early the X targeted First Dove XX% the X,XXX XX-day oil producing an foot of September recently wells, Springs. completed over addition in wells near Delaware acquired in Lea and X,XXX The rate in Mexico over line. day began which laterals IP well Cattlemen New per acreage are In had state

this Basin have X on less Northern we pads. average wells on acquired couple months. Chisholm wells earlier we a payout I'll these X additional acreage, year, in an expect to our X highlight of of than We completed Delaware those. separate Also the

rate 'XX. X,XXX IP-XX Bone This pad, Salt Tracker we day with July average on Eddy and per of Wolfcamp of IP-XX highlight targeting to an of pad approximately oil had X A during Midland targeted the over which cut Spring per interval. Basin, in Both Draw X-well In in Mexico. from developed brought an turned like September, the New oil and wells in wells the quarter finally, feet X the had acreage Both average in an We pad of the of Texas. of was day. wells BOE of XX%. early County, on And laterals X,XXX The X X,XXX laterals I'd the in around Second acquired County Barnhart the feet to well had sales XX%. we in wells pad Irion Cletus cut BOE X,XXX

with drilled feet. approximately XX,XXX length were lateral wells These of a

been just XX% oil. drilling well is we over X with pad rate and these in IP-XX The wells. each producing the average production in the day began year. a was average, the given per with completion costs pleased an for mid-August these only million. and the of have $X BOE and On out expect pay them results nature And from wells, rate We of X,XXX low-cost

area. XX and to capital identified in our allocate We've portion of a program future continue over area this this will to locations

recently is our to continue As pressures. to for was in We and on well the asset existing laser-focused acquired across as activity, inflationary LOE processing reducing due items, on the our as workover we base. than higher be assets will increased increased gathering expected. and charges This including recognized quarter costs several past,

by that workover goal has need return methods lift to and to times acquisitions. as offline improving designs. the optimizing The is production of and we additional were time program rates to at repair reduce benefits wells or run and work long-term increase the mechanical failure The

over BOE We returning the on to production. million per quarters estimate X,XXX over $X spent day we X a approximately projects, workover little have last

to That first the together inflation inflation the overall systems on decreased synergies a Given in guidance the our relative factor. change to our estimate lower QX July, seeing is expected increase still rate see what low-cost certainly of put operational mindset, the X% we The LOE true. side. to we BOE. and will inflation were per year, in has of but of we QX continue into in with from D&C When personnel is we half range to held

to over it turn I'll that, With Mark.

Mark Lumpkin

during comments meaningful providing Steve. highlights. key today you, on on I my details Thank will focus Similar additional metrics some the and past,

of our in a available our is breakdown earnings results As you in XX-Q. know, and detailed release our

at billion. by billion. increased billion the our $X.XX under the balance sheet credit $XXX the our the million Subsequently, the in with to in to in conjunction commitments were First, from the starting normal redetermination August $X.X closing conducted further time with of from $X.X credit the increased particular, base increased was borrowing $X.X Titus that was commitments, facility in more electric XX% to facility, and September course than billion increase Alongside base in borrowing acquisition. borrowing base and the

their base. with the being really for of increased our to asset Earthstone high banks borrowing our I'd a like commitment support our quality in and significant of continued increase thank indicative base of

Now or let per for $XXX quarter. was me $X.XX the million to quarter results turn adjusted the for third financial Net share. diluted income

was $XXX net was adjusted XX% adjusted higher per quarter-over-quarter. million, which was and $X.XX Our share EBITDAX income

and a for the Third records the despite production and that second saw adjusted peak of EBITDAX from both quarter by remain from quarter driven were down oil quarter assets strong the Titus partial adjusted were and prices incremental full net quarter. very prices the company by we commodity in of Bighorn a complemented assets, income being

quarter was quarter. cash for increase approximately Free $XXX was flow million, second the the a from which X%

flow also a the was generated For ended $XXX record XX, for X we which free of months September company. million, cash the

free have repay facility We flow debt. credit to utilize continued to cash

quarter, On billion. credit facility. under $XXX the XXXX, total During Titus adjusting we approximately $X.X debt had down million acquisition, over just paid and the of the million credit we the September drawn in facility on XX, $XXX for debt on

remain and to X.Xx, annualized continue debt going quarter ahead cash free plan. fully to Xx was use expect of the is third adjusted our to to We debt flow plan forward. to ratio debt reduce to EBITDA Our for below EBITDAX which

are a of day, production end per of natural XX,XXX guidance which X% high standpoint, production gas to approximately pleased gas oil surpass barrels comprised liquids. and quarter XX% company with our of of equivalent we by oil, natural XX% third record was the From range XX%

X% results to our expected the are of fourth oil XXX,XXX equivalent range from program, about guidance barrels with Given XX,XXX by recent our day. to strong we drilling per from quarter production raising

than spent prior in expectations. the to a capital third third quarter, expenditures. million Turning little the our We lower $XXX quarter bit which was

the capital million prior wells quarter in our the guidance, which second a lateral extend of the we the about guidance This the the improved longer compared to is a by This half efficiency higher degree, length by to completed And in our range from really to expect activity over August is of million. quarter, $XX CapEx. the largely million driven lesser drilled the to second XX% of fourth capital $XXX compared of fourth plan the midpoint levels quarter. with in for for at to and is the resulting we in an For $XXX little expect year also significantly increase fourth non-op ability laterals. our half year our capital prior to

the per $X.XX the activity expected our quarter, renegotiated coming assets agreements. for by in by As was expense equal about approximately of on at acquired above the which with processing $X inflationary LOE our than higher in BOE was several driven reasons, was This gas parts per midpoint Steve operating pressures mentioned, for BOE by and guidance. workover recently

gas incremental the were LOE. is we which through increases a or but this side, percent LOE, to that renegotiated from that in largely recut it's On processing just the contracts include revenue. It's than more of increase in do increases to fee-based agreements. our This our offset by LOE, function of proceeds move flows

to are we expect $X to is to So it per be very LOE in moderately range the benefit net a but fourth We LOE. of $X.XX increase and do lower the BOE. positive, guiding quarter, does

note equally currently our hedging for guidance, split for enter fourth gas. relatively provide the also but upside the a gas. front, mix collars. exposure swaps, book we're largely collars for and oil fourth and to on around downside quarter oil and approximately structures On that that XXXX XXXX, XX% XX% provide utilizing And about midpoint at our between quarter would continue about we're the of oil and protection for being wide hedged hedged for I into hedging with puts commodity XX% of based gas book we XX%

our find in presentation earnings we position updated to can posted the website. hedge You the

gases, is to we for of in are XXXX as good going covers our we close that basis WAHA really WAHA versus pricing gas exports well. to bit our WAHA. total hedges place XX% we've got about with basis exports do forward of of a for Channel have XXXX that to like I'd on Additionally, gas a and hedged Houston XXX% to that highlight of And WAHA percentage Ship heavily hedge

I'd increase highlight our to like significant Finally, the current train in liquidity.

averaged $XX We traded we're For quarter. believe the the shares per an will value about added million was see shareholders, which of third over or X% the existing future X.X really day train second improvements per volumes quarter, trading day, pleased of to this benefit million liquidity. and in increase liquidity trade and the

Robert With that, I'll comments. turn closing to it back over for

Robert Anderson

Mark. Thanks,

long-term the value that ahead to criteria we drilling include Looking allowing our assets on our potential return options on executing reducing and the add acquiring a additional into that fit credit to to to complementary future sheet, at best organically balance finally, of cash will rate opportunities Earthstone. while debt outstanding bit, program, deploy high will for our flow stringent continue continue our substantial options will time, believe create facility, same provide us initiatives. maintain our shareholder return we shareholder Those which expanded strong production execute the

available facility. flow options, we is As credit these evaluate free to our cash our continue use on focus reduce near-term to borrowings to

base a a our leading of In operating approximately that mix, further a drilling that efforts less closing, per low-cost over grow provides long-term. maintain, production stable a product but a perhaps Earthstone of and bit with future in have years, X a inventory into BOE transformed diverse day locations deep more the than structure to we production high-return E&P support XXX,XXX

of the the In at cash of values company lowest we developed E&P we've investors, multiples an and proved reserves free including that flow significantly that attractive highest to summary, our one a below value current believe proposition one EBITDA the value. a having yields offers to enterprise is valuation in built sector

possible of commitment the of as this support and and would work our our continued dedication constant shareholders. without none workforces has important been course, best-in-class Of been hard have

to the some operator, take back call that, to you with to turn questions. I'd So like

Operator

from question of with Instructions] first Our the Johnson Rice. [Operator line Meade Charles comes

Charles Meade

what further wondered but those not wells see laterals, like Robert, prepared it how longer talk was avenue to I It X to performed addressed a Basin you versus improve good those the your might probably forward - And in and those well bit comments, be are that's you most those seems results? your I the that think only your recent Delaware results acquisition one. on do could about - the to there. those acquisitions most case? -â€“ second, opportunities this going if obvious

if So aspects? X just those could you about talk

Robert Anderson

like really results. We the Yes.

it cases, on couple nice mentioned, cases. We're a little Steve type to in And pretty compared in our conservative met always we of kind results of, kind the maybe way As is acquisition some curves, a we're on higher which the see. our of cases, value assets. bit actual to

wells So outcome up with the the that's are. kind way these of of lined

super it's longer it's do few Probably laterals, important, your to allow trades which importantly, destiny. is but that us a controlling more just happen

on horizon and the of working where expect not trades drill up. when we in far, would what probably we're to they're wells this coming all control depending as look we some same, we're we're really seen wells. have results good so have and on the we'll horizons exactly together, But and our some go different future. where we we've I with So actually that all can co-develop the going pleased but be more drilling

Charles Meade

there to area. have And in, of value general peers I then wherewithal's think up on laterals, by when XX,XXX those locations I foot that guys picked that just that, Irion. you of results the than sticking those better the in, you I results. in that's you surprised ascribed lot that a guys other are And was think area But turned recognize but an assets. not turned in I in low well theme

there you around path year. the for that mentioned I a So know is

about talk I in your imagine XX So And they you where top inventory? stack. those locations on guess I mentioned more the you have you Irion can already But wells that your at puts there. don't of slot

Robert Anderson

and bit bit on high will and come them, They to begin oil like a XX% the upside. value They're to up get over ultimately that the but to a acquisition They're little they mean I or have oil we at good. we cut that to rest XX% gassier. oil rate Yes. Charles. with, little pretty going into gas. going time end weren't gassier we knew But a

we acreage we'll little for value And free, PDP. program those capital our gas, economic got a how locations for They of them, mix want to portfolio you area. as maybe pay on literally didn't the And I bit so drill depending to $X for that those in quite good. allocated $X that in be at us a good And still gas, look good it's there. not XXX%. won't really add but at anything

A to so drill economics to line. cheaper it's little full the compete, general, command not rig in still a going but

Operator

question of with Truist comes the Dingmann Our from next Neal line Securities.

Neal Dingmann

Rob, question my on is first Permian development.

this at development. stack attention been scale talking lot people about Specifically, larger season a there's certainly least on earnings type of industry

how I target many wondering Robert, can plans, numerous development target? your So players you if other continue the details you maybe just And you might zones was of give plan and of to Titus including attack Steve in how to or maybe yours? upcoming start or general

Robert Anderson

X, question, been a We've whether we've Upton in Upper depends on we've we B want the on new A, are. been a and where in at as third the and whether Delaware, co-developing the side. a just the Delaware second benches got the we X we're actually to benches the it's C. can the beyond and side some it, that's in for first time. acreage that to it's do us. we Neal, continue In it B, or depends where you or Lower one then And our now last and And co-developed call develop where places, you Bone Well, but that. something instance, years plan, it's not good for Wolfcamp few development Midland the for are, going County, B, even whatever shallower deeper Springs to Y develop and A then and It

that to pads, and our Mexico point quite now, some side we're we doing side New on flows can our Midland on the do given for size that we've getting So time. relative cash and finally. been the But larger

reservoirs. and it's new So to to optimum a the it's way concept us, most develop not the

Neal Dingmann

maybe secondly, you Mark, just on shareholder specifically returns or then And stock buybacks. for to

estimate, holders months is, I I there more purchase seen share this will recent anywhere. to in we specifically, then all wondering, if accretive you is stock looking your continue think we've X think million out my price tied transactions sales? buybacks at? in if at is further question And of just be have what active the of remain And any how to to private I'm your one your

Robert Anderson

our and that related Well, stock sort opportunities have. valuation it's price we of then and definitely other to

this continue for something to situation maybe that return one-off up. shareholder like us bit in think It overall owner. still yet come a for on a if with little unique of the particular as was to be evaluate we I about So will And other a that opportunities initiatives. comment we'll It's that early mentioned, terms that. XXXX,

Operator

the from Campbell Jeffrey comes question line with next of Our Alliance Partners. Global

Jeffrey Campbell

Lea to I was, the Middle if of large lengths of I the it contiguous mean, of Eddy very approach been Draw? differently. in that little particularly the wondered any Northwest what the test lateral the the Salt activity thought Eddy mind I portion and Salt in wanted results really short and compared you result, of will top county have to any But I to a Counties. was hasn't impressive Draw with bit a XXXX

Robert Anderson

that area, different additional actually amongst there, full XXXX different block there. Yes. the pads develop with County like X my us just we our and wells rig will us spread more to confidence and out little Jeff. Cletus and good in in to there. are a Irion pleased but it's this economics Great gives in program command Much to the wells over as response of give Cletus ability end and well some towards We're question, continuing in not that really rig or projects. into results, going drill in a over capital The the year they

Jeffrey Campbell

color I any recent give pretty what just you significantly could that noticed exploration huge was a number. to up expense on quarters. wonder high-level I us on relative go the represented? I'll if that

Robert Anderson

and people don't out those good most and plugging pad Yes. well a on was we've we in Mexico, replacement That's the it, since question. a one we a of issue things. pad It was New it an X-well did up on ended entire catch kind and and drilled had And well. we

mechanical the had of and execution in other of ultimately the not that, from any hole than the noise. or we shallow issue a So accounting portion bit has other created standpoint confusion a it's little problems

Jeffrey Campbell

go And finally, limb little here a the bit. on I out

could wonder any I'm And Just length color XXXX might got increase the additional wondered XXXX. continue throughout if of it of like. you year most a as provide was Basin big portfolio also at expect an the effort? relative this time should look XXXX if about next lateral in regarding Delaware thinking rig we part we've the to to average to what really

Robert Anderson

XX,XXX to there going the and X,XXX the to some best in drill footers. We'll we We're most X,XXX Yes. do and possible. can up capital-efficient with footers program end

probably bit to quarter at about that see early that in today program program have X XXXX. and obviously fourth mixed cost. will of about suspect But have footers this what And for rigs think be a about because we similar looks can a think bag. next this planning X of sort probably is little where a to of year the We're XXXX. that a planning good X in running of done thinking hopefully stage, look upfront takes up which rigs what might the we as we'll help. planning. we'll really We've we've got kind we this but a I lot And scatter in ballpark some just lot it's it XX,XXX proxy there, that for capital XXXX. areas So what like end year for will inflation we

Mark Lumpkin

too. some a program. production as and a flush has And from is production that, brought a pretty is of maintenance Titus from think of that before really bit There a quarter, we standpoint, well steep the but that rigs as in X we about decline,

about of rigs maintenance midpoint a next a think So fourth the we guidance think does program quarter our that's of X for day. that's is the about year. We for XXX what

Operator

from Subhasish Our Chandra comes question Benchmark. next with line of the

Subhasish Chandra

optimization of you [articulates] might if that how can the heading Robert, year, all? out new sort about just workovers phase work, into field the talk et at maybe cetera,

Robert Anderson

a from needed end equipment time is we Subhash, for knew the And it high-level examples maintained mean, you a where or some into stuck lots going I of on that acquisitions, we that can Yes. standpoint, sale. a reason of to to with give up wells you Steve through capital was process acquisitions, when wells that weren't make something one were hole. spend another, spend these on. in going And we of going

But well-fail workover I these do is we many acquisitions work big us, that's And you wells of some behind do I from not slug on, we've when an of Steve? ongoing identified the program, got have to fail. course. and think think we're going some as wells as do, wells

Steven Collins

peaked workover now think in one range. XX we're I about X% the at at X% rigs or out about and working We so. time

And of on through economics. much workovers that went crest the on. we chosen So based maintenance back basic to now everything and some we're pretty and got

Subhasish Chandra

Maybe of making I you're guess, revolver and for paying about off, to debt, off? the term distinction loan trying is a Mark, assume pay you should what or are you short-term talked the as that we between everything sort

Mark Lumpkin

both paying how sense see cash it don't done if dedicate a term-loan another we all differentiate any some is of when could point, of off are But there's there, Yes, could the flow term-loan we a Yes. the pay part same component. priced and our At off component makes have the They not use if decrease. facility piece. of rate from for yet. we got revolving and the to little the We've I trade-off term-loan cash, term-loan. higher bit do that, free standpoint. a between that commitments the wouldn't you credit to

we might off year-end, but maybe, term-loan, now. decide it's to some pay we've not on that Before the something or right have decided

trade-off like about pay paid incremental that, like us And little here the spending term-loan, maybe pay half now. right pretty and commitments. that right below on for by that, now, acquisition think bit we close debt, cost will really that front, some even more was powder down better good I we half get pretty a on price dry to commitments the probably on the available total $XX million billion flexibility on is we're to but of nothing we'll target having even some being there's if the us. of So of year-end this the more with buybacks. small We're feel down now, as sort that, having past we of Yes, a paid and down of our that. that Like track $X.X month down for right

So that good, paying of permanently about and pretty some that feels as undrawn available. we feel term-loan have better more down we'll

Subhasish Chandra

for final one And me.

rig of you the you? and assess comfort you for how performs can a With of coming you with see fifth how talk bit to it sort to it think maybe familiarity of being do you that line deployed need time of sort on, your or rig little might

Robert Anderson

workover standpoint work, rig a whether or learning Well, a operator curve the from crew. new company the both standpoint as you it's put and always a frac there's service rig to a or equipment

rigs X of some to be for kind them and X some area out we to may they're scattered months. develop going efficiency got in to So the of work for you an X while. point, I don't we've of right put it up then And to acreage expect and a run Mexico, acreage. for the fully position side-by-side full sort But find be at want to out to New

sooner prompted last in was rig the So in than months, it's the it later. this our been all our Titus for acquisition adding has several it - and planning

feel air up ability get just the we in about the good and this to So pretty going. rig

Operator

from question Jay next line the Geoff Daniel Partners. comes Energy Our of from

Geoff Jay

X sort Like, how rig when rigs? those laddered X One I quick on of million of spot much do have they do next rigs? guess, those to terms exposure the how year the on are and you of pricing question had through $XXX I The But - the what rig wondering, fourth level. right, million $XXX CapEx feels to kind the about just are quarter of program. annualizing a

Robert Anderson

all months. terms, they're Well, generally contract Jay, or varying X XX

X of under of think XX-month other rigs periods and contracts off roll I that X have X-month different the contract at or time. we the

basically go really really could scenario, So And we this to range, rig year. next terms, or a let to $XXX a bad rigs, keeping $XX to we efficiency dollars up the off we thousand continue price, have X oil higher our little can go the and few close feel chance price is we're hours, get that to the we in end seeing always the if a but But these as exposes a renegotiate on a they we to if same. those we're good. cut day you in of with

Geoff Jay

I around unrelated, seems then deal like the guys, as in every you - you of Delaware but middle the often And talk anyway. to every front, is fight. on everybody basically, knife to says see it go the wondering so a deals table and the But just acre come then

there is lay the think of M&A in the you do land what the wondering Just market?

Robert Anderson

done. mean, the Permian. pretty of recently I are getting deal deals seen and yesterday. some them sizable other we big are in We've announced here some a things saw Well,

that the XXXX a will think little sale landscape up considering I private guys bit. of equity in pick

of plate at. of more and get or is the about and this our - little things, think be be there's but But the quarter we're at, now deals lot quarter that look fourth to nothing have few will be doubt full things whole rest I'm bit year-end, a cautious deal a to optimistic between look going on going the a us maybe gets closed for we slow front, announced. and I to evaluating get to plenty we'll everything I going

Operator

Water line Research. comes with question Robertson Jeff next from Tower the of Our

Jeffrey Robertson

acquired. Basin, correctly, are it Steve, some have Is County the the February. It if or back fair? of might the I results in Delaware acreage all you've Eddy Robert a that put you as you expected value like acquired you done on what sounds it this better when you when remember drilling on didn't high in than

Robert Anderson

met expectations, Delaware or Eddy allocate Basin bigger lot way allocated have They is The at Draw core a least Basin. in value area we to at core that the just it of of least of didn't our to Northern block we acreage the was Salt County. the the and the Delaware whole the in

and thought. for it we expectations it had proved we like So high out

but with block So I saw. wouldn't we're capital. our in we County, we're say to we more spend pleased what Eddy didn't allocate Thus, going X bigger to

Jeffrey Robertson

number the Is some program, there? given X-rig issues logistical the that rigs right just Delaware permitting and of Basin of the over deal you with

Robert Anderson

figure Yes, and got Delaware. walk and third with the were and walk well going acreage and it and we're his a and amount. if is. we're But again, as know makes feels over say, to - and stage Steve we'll over buy running you to more with said it's there, I like the rig executing and are before we'll we sense some now right it that we as another the We fourth again going find now out run. deal, we group have up then like the or and sure to whether acreage permitting to X for infrastructures, about the can, rigs, it the pick now, to And For we over like X, make footprint rig. we get we've like

Jeffrey Robertson

Question on Mark.

didn't the the it talk On more read one-for-one the would in that you footnote? pay this a the if amount you term-loan, XX-Q bit little committed maybe on I mentioned down in but that? Is it the or have have not you under about RBL. see term-loan, that can impact yet, I a

Mark Lumpkin

sure. Yes, And closed that was really That's tides. one the right.

we've now So $X.XX a is, base. the billion structure got borrowing

a fully billion term-loan, is course, of of commitments. not piece. allocated of total That's a funded. $X.X million that's Any to and revolving The term-loan, revolving term-loan like, tranche. million the $XXX repayments have We $XXX to a tranche

and were million to we billion. from $X.XX pay million term billion if would million, the to $XXX term-loan, the that it to commitment from off $XX reduce $XXX of loan overall So will reduce $X.X

Operator

[Operator to for Mr. remarks. back to further in call closing the I'd over queue. Instructions] questions hand Robert Anderson like are no There the

Robert Anderson

get to we Thanks, spring talking the you once forward look in to everybody, and we'll through the year-end.

Operator

today's Ladies teleconference. participation. Thank you and gentlemen, this your for does conclude

disconnect time, have at this a may day. and lines You wonderful your

Earthstone Energy (ESTE) 3 Nov 222022 Q3 Earnings call transcript