WLL - Earnings call transcript Q4 2017 | Chord Energy Corporation

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Operator

Good morning. My name is Keith, and I will be your conference facilitator today. Welcome, everyone, to the Whiting Petroleum Corporation's Fourth Quarter 2017 Financial and Operating Results Conference Call. This call will be limited to 45 minutes, including Q&A. Please limit your questions to one question and to one follow-up. the of to Investor turn company's Hagen, now President Vice Relations. will call Eric over the I

Eric K. Hagen

All right. conference Thank to Whiting you, Keith. Good Corporation's quarter morning, fourth XXXX earnings call. Petroleum and welcome

Senior me Pete of On the Brad Senior Mark Exploration Rick Vice & President Vice Ross; Whiting's Hagist. Senior and President CFO, Stevens; of and Development, Holly; Mike is Vice and President call Planning, CEO, new Senior President with of today Operations, Vice Williams; President

the our results & then at results and materially the review forward-looking our be menu, in note the fourth for During that This slides, and statements we'll on this our click risks is www.whiting.com. the also Events for cause quarter forward-looking XXXX, the to presentation and to and please subject Please discuss and XXXX. on website call, answers access available on questions Presentations will outlook remarks click then the To could Investor that differ being Relations to on include conference those link. call box from statements. recorded are the

release. information risks concerning forth earnings set on number Additional X our in is slide and forward these

is Our the with year December Form Executive expected Holly. Brad our Chief today. Officer, over ended XX-K new later to to that, XX, for filed call XXXX, be turn the And I'll President and

Bradley J. Holly

would in I thank company. the for Directors to all given I've for to to Eric. of like would XXXX. the I lead opportunity done you, also job shareholders Thank and Whiting Board well thank employees a this been like

for and XXXX call hand for initiatives of guidance. Mike? XXXX the over quarter and I'll our vision strategic my overview introduce to Stevens Mike brief I the a Before Whiting,

Michael J. Stevens

to million XXX,XXX analysts' of increased levels. share of a fourth the the flow significantly was $XX Thanks, and of BOEs $XXX below guidance cash end XXXX. oil XXXX strong million At operated BOEs X% in million million NYMEX XXXX. XX% XXXX over Brad, the our development operated in in who increase will to a $XXX will quarter. of of Operating and estimates. day fourth from of $XXX the balance Redtail Williston I'll XX% over Production position, just price. discretionary flow $XXX of quarter million of were exceeded approximately quarter forecast is Capital over the of cash at Brad. per quarter spending down at flow cash guidance XXXX. with total was used low on high end low day, portion commitments. average be commodity over This G&A project $XX for Earnings prices the Williston the production XXXX capital we and of was fourth is Fourth XXX,XXX the the was the initiatives. substantially a hedge average strategic to or current volume free both budget by per Whiting's grow pay budget Whiting's the settle is $XXX to vision differentials for end Basin revolver a at guidance. the Basin. turn spent quarter and quarter. CapEx back Oil and activity outline forecast XX% below our to million production for call guidance, and exceeded third

Bradley J. Holly

plays. efficiencies I've focused development and spent unconventional driving on multiple past decade Mike. Thanks, reservoir the across

initiatives with virtually employees are those all of town and swaps. with I've a in and shareholders. Whiting Over more result operations approach, historically visited vision a growth past X met optimization Redtail and asset following hedge small including with and a efficiency, multiple XXX our and Williston to striving Basin days, numerous group greater and sheet. I've We're a balance in times, interactions. have plan have analysts a develop free adopt also to and the base strategic balanced strong of margins balanced adopt We flow. we hall spoken with plans Whiting more sessions. Tier philosophy the at The and while to cash than driving

XX% We currently hedged. are

$XX on EBITDAX cash We basis. pursue to sheet. are an we below balance optimized targeting X to We to to capital net XXXX, strong times debt price strategy at In Whiting of growth oil NYMEX completion a implement through this intend a and achieve project a strong maximize a plans efficiency as rigorously free combination flow.

streamline the These and reorganizing profitability sand on to to maximize recovery focused in operate. the enhance from each face corporation. as are In Bakken value and we spacing maximizing sales pursuit point. we our should economic communications. a We to changes unit goal, drilling are We operations teams this efficiency of our intend

We this going all to to aspects are of our work goal. business on achieve

exploring are an have process. the of We to manage the Redtail and monetization retained advisor

there X.X team X disclosure superb Redtail a a that provides and new more field's locations. production has continued reflected strong profile grow a every wells into production drilling inventory. assessment high-graded risk, our a potential. assumptions. This are incorporates our morning, clarity XXX,XXX potential in corporate teams spacing did This Our operating acres Williston we with during days. the That's is This a XX to Tier job full represents It first Basin. more new well by net posted gives on charged the and currently net an from provides of area, in and quarter. detail It it strong This initial quarter. presentation that opportunities believe look, asset from generating conservative putting our capital realize to accelerated compete may at not we the benefit Though Redtail, our returns many with the deliver can opportunities that does are Bakken assets.

exceptionally operations also which to during areas, Whiting show job we presentation performing provides downturn. our to curves are well. core that done the great type and new margins a our has support Our increase improve

laser-focused Moving forward, enhancing on be margins. we these further intend to

to are accountable plan. We on deliver holding ourselves this

compensation add return significant your of I return projects. and free highest generating To summary, The a of an level Bakken to is support performance excellent the rate questions. Q&A. only forward first Directors core Keith, up of step flow. rate plan. to in to Whiting in that the the Board open maximizing we drill please well-poised strong cash this, In drilling ensure Whiting's growth metric for corporate is has elected with executive position to call conference is look the

Operator

Yes. Thank you. And the first from question comes Dingmann SunTrust. with Neal

Neal D. Dingmann

to all. biggest on of question Bakken like inventory first seems the in to investors, Brad, the concerns Morning, And, congrats it one time. is, with seems Brad, quality. the talking be overall

now, me. Could that others inventory explored to You've your of how quality view out there? obviously you versus sounds all your it acreage about just talk like you are

Bradley J. Holly

We afford as to we the our our that I'll additional us have we Mark at wells extensively opportunities We Bakken. there's the about core certainly looked are in With inventory. real drive let core be really add that there, taken acreage really thanks and the feel and more that forward on the we'll Williams We've here, like feel detailed that as Neal, question. to economic using here. position X at we think good well. Sure, the the and Tier on acreage look a are to technology that, for drill, well that have of working as comment

Mark R. Williams

at look all taken of our the Yeah, Neal. a We've acreage basin. across wholesale

in got essentially X,XXX It's the X slide Breaks. got Hidden the on we've X, and see, at our there. we've Sanish/Parshall, you Bench can locations essentially Tier are we've here, presentation areas quality got highlighted in and East page on it As that Missouri Polar, that shows

good So Tier quality the areas have well. X as

Three of of thorough opportunities, in and have reassessment we've in us. eight six X, our rack here, there's locations, that's most Three Forks. eight we've on it for X think example, locations ongoing area. great growing Tier within We a review good but a the some operations, and wine is the believe Forks, taken got four We've in in what to depending got, where Bakken pretty available both to we Pronghorn and Bakken, Tier is got we We've of to

Neal D. Dingmann

Very Could about basin. the – before about for early plan something adding selling you that maybe still focused at is on Could you've of good. know talk – activity. how M&A about follow-up, of else? and even talked buying on talked talk about just I of Whiting, you And on sort you a – then you've you your potentially And doing looks about the one think days what's potentially some sales. required new Are talk that things? you out Could year? also reminder some a about Brad, something

Bradley J. Holly

A great question, Neal.

quickly. As an we're we fairly we just have Redtail, forward talked about, advisor that moving hired the and

at and assets, is to in process its Bakken. that second currently quarter but so well Right not or look. way our continue We divesting now, position really be will core like event. on we're And the non-core we looking here

the best existing and the a is in to ourselves Bakken, places. really great we position drive to advantage have Our if in take basin, currently to be focus and opportunities position and our efficiency in as recognized of they for that other surface watch put in the continue here

Neal D. Dingmann

sell prefer guess, to So the you to, would else? rid before you something adding think – about want Redtail be you I of would anything

Bradley J. Holly

now, Neal, really acreage the that just efficiency have driving and on into program. We're focused right we our

Neal D. Dingmann

very good. quarter. nice good, Thanks much Very and so

Bradley J. Holly

Thanks, Neal.

Operator

the Morgan next question And Stanley. from Drew with Venker comes Thank you.

Drew Venker

matter cash as a Hi. time. you that of evolution at increasing of much about Good or priority you talk morning, company think cash that's how how stable? relatively forward? the the target can I you about going flow it to are free uses trying the if was you're whether the something to Does and guys. Brad, over steady for free hoping, expecting Is of level? it cash profile manage And flow

Bradley J. Holly

a great Drew. Yeah, question,

cash and we flow. you free thing, first significant flow. Tier cash free can yeah, you like So, X production grow We if a generating position, think generate have

have a We so, well that are and in to using assets pay that that to as we to free do cash where additional are potentially growth, we're both objectives. certainly the looking to spot at the the to as flow. quicker looking achieve ability debt our some forward reinvesting people having have that And that. we down excited And have

Drew Venker

just that Redtail. earlier balance would that of that sheet treated comments as cash any about free just And, potential or to to a like flow? other on the Brad, Would your be from proceeds source marketing follow-up sale go

Bradley J. Holly

Yeah, rule or share Drew, great buybacks reduction reinvest to out not question. but likely this for debt would going we're growth, at We point.

Drew Venker

quality interest Bakken? any in there's acreage the high And adding, in available Okay. if

Bradley J. Holly

Drew. Absolutely,

inside accretive the there use the for if and can opportunities to company. make constantly a outside both are Bakken its looking is Whiting strength see to place for where opportunity We an

Drew Venker

the Okay. Thanks for color.

Operator

Freeman the next John And of question you. Raymond from Thank James. comes

John A. Freeman

Hi, quarter. guys. Nice

about had First that. if sort on than of we the just cost which last update I of can of question the lower talk is bit the guidance, a primary good well kind we new had, drivers

Rick A. Ross

last the million in quarter of the the – there of Ross. really efficiencies is – We out The as a put some there technology. believe, on what bit I put doing XX, we've were me Sure. excuse a out technology that's Rick We've some related John, in through this that cost. $X.X this to result little we're doing additional put slide year reflects going completion of last of to in things estimate terms we that you that for and year. to XX of be drive our we've hope the stretch

John A. Freeman

you get – for provide And We you can is the exit in it Redtail? if Can all me. gave I then just it we just gave for the embedded rate for number one Bakken. guidance Redtail. follow-up for what it wonder all

Michael J. Stevens

be going day. XX,XXX to around BOE a It's

John A. Freeman

Congrats Well guys. done. again. Thanks, Great.

Operator

next the And question Nelson you. Goldman Sachs. from Thank John with comes

John Nelson

really again appreciate running time Whiting maybe maybe congratulations the strategic Brad, it's kind to Could first you step what call, your priorities. you on to And, opportunity? say on so just, the I and through your appointment. back morning. you and attracted vision given Good of the

Bradley J. Holly

a Thanks John. Sure, lot.

know, you outside trying in, that on As you're when make you're assessment. always looking the to

great really in change nerve was Whiting wracking day. positive thoroughly They here, move to what a every of work succeed. certainly loving they has and impressed. I'm end. to go and a a the to desire desire direction. have about that it high XXX And just real women to The After that high I'm men it So though, people days on are organization,

with just office, have field, the that couple as as put you well that with really the outstanding a and X in that Tier You acreage people we in position.

North business. about Whiting Dakota, impressed to And our with as doing way and traveled I've our assets, the very both people been goes and I've so,

X, And to November much today look to I it more with really and forward. so, this forward am working on I excited organization was than move

John Nelson

midstream growth you on we've with providers, that kind just to and then XQ you been to laid out? And seen growth, have execute expected XQ comfortable processing that touch your in capacity helpful. you've capacity of to there's sanctioning feel That's the operated some additional of plan kind recently. that – XX% gas the do just Bakken the of Can speak you

Bradley J. Holly

let great question, Sure. That's Pete a John. that. Hagist I'll address

Peter Hagist

constant taking Yeah. Hi, do have planning of in terms our We're a cycle. in They our with outlook John. longer gas plans providers. communication in progress. We're

very So I confident needs. be takeaway able we'll to feel meet our

Bradley J. Holly

add point that front has And out, gas capture North the on over in of just time, and that. to that, I Dakota that gotten out would percentage John, rises forward-looking been very we've Whiting in as

more we so, And basis gas required. is than capture generally a currently significantly on what daily

John Nelson

That's a then Yeah. or wasn't that of a chart, clear operational there an just reorganization point. the more with of the that housekeeping. reduction just org kind comment? be are just team from the Bakken of signaling you could good workforce point. personnel, And one, last that on I a Is kind

Bradley J. Holly

as focused to of other there, and a gives real Bakken. technical highly Dakota, on a than take divest signaling North working not that anything I'm be really distracted we we're what Really, in Redtail, John. the team and opportunity solely by the us No,

And also so work lines. going we're more to across going and on resources hard work to our to discipline really we're Bakken put assets,

to from when that we're the molecule to work the at face, the we release operation. until the I say sand optimizing on so, at it that point, go move And sales time to entire going starts

that and and environment and and together optimization operations completions it's efficiencies really And getting to drive in and a so the field, drive engineers drilling working all land the team-based program. in

John Nelson

congrats clarification. helpful Thanks again. That's taking questions my and a for

Bradley J. Holly

Thanks, John.

Operator

comes Grigel to back with Capital the comment. W. - from Macquarie Inc. focus Brad, Capital. morning. question And good Paul on Macquarie Hi, the Grigel next you. Paul just Thank (USA), wanted leverage in

were year. guys You at fifth the through the halfway rig

the growing two of focused How two as gross that we types. EBITDA numerator on below to about priority times to down and kind of versus going the of get You within balance be in debt had should kind the thinking that? reduction

Michael J. Stevens

do here. to grow we be going try We're EBITDAX. and to cash both. a That's cash plan inside really really oil crude the a more flow, at We're especially going to of We generating flow, can grow more lot lot prices.

that free can pay down the cash use debt. going we to generate, Secondly, we're flow to

(USA), combination both. Inc. of Grigel a really it's So, Capital Paul - Macquarie

Okay. And I maybe, it, can guess then you too. talk about Mike,

XX you Just to going a through more stronger the of XX details hedging bit a on thoughts the change a the months forward. going Can having position position, forward, there on that? walk than on around hedge

Michael J. Stevens

really on to we XX% did of on and see, flow, We're barrels plan in did layer collars within ourself can probably we going up swaps plus going and protecting hedges, a grow can here you got We Well, XXX,XXX between still ceilings. XXXX, floor, to some hedged. the cash $XX the be XX% where XX%. forward. $XX there got got start XXXX. We got That's

the So so to them protect more that the up on flow more at. XXXX keep we free layering is Capital of basis we're like (USA), going position Inc. cash to aggressively? moving that where position We're higher. keep Grigel - Macquarie on Paul And and trying

Michael J. Stevens

- Inc. Grigel Paul Capital (USA), Yes. Macquarie

one could. you're rate metric And if have of Do Okay. then something return been discussion has adding corporate plan? similar? And over I the on metrics one, adding comp guys you the detail drilling there any to last or any return of that on time a rate

Michael J. Stevens

that. a we're took in efficiencies. their metric long on to of target meet all rate going They Yeah. XX% strongly the we'll that's able committee the all the a feel decisions. with changes metric, set the drive comp be return. time discussion The There's And going really on We that of been internal that. lots organization, making to at

Inc. Macquarie Capital (USA), right I think much. the direction. you very Paul Grigel in - Thank we're

Operator

from question with And the next you. Jeanine Thank Wai Citi. comes

Jeanine Wai

morning, everyone. Hi. Good

Bradley J. Holly

Hi, Jeanine.

Jeanine Wai

Hi.

a multi-year on free think from So question and well. versus So items on is cash your since presentation, Can you your talked that looks growth with flow production we plan is growth about Just it free anchorage that. the tradeoff. as for example, a flow free on? my attractive minimum investors cash commentary rate is certain you Those what talk a yield you And in the two always cash peer that reinvesting and a group? are mentioned flow or growth. a it, attractive wondering about you growth free for noticed you is conversations cash metric flow multi-year

Bradley J. Holly

Yeah. Great question.

– in watch this to try I both think to running that going going a We're to I our we're And metric. managing that's how what one our thing we're our particular to on is, performance does, intention those going to position makes think prices constantly balance. of everything, work any company commodity constantly do, we'll – fun. our we're and are and don't how

Jeanine Wai

type details Okay. Do assumptions is, the sensitivities any that? And you It about what then predicated to have oil. multi-year run on of the my be $XX plan? on follow-up do seems you other behind

Bradley J. Holly

I mean, mean, what look we've we can I $XX. and ran what ran at all tried look scenarios, to probably kinds we we – at like all over it and of as at different you like kinds that appreciate, look sub-$XX

And so, way. at they outcomes, robust we're could the and come strong where to to we're any commodity organization and certainly that manage different we're prices very trying our potential have very

Jeanine Wai

Okay. you for taking Thank questions. my

Operator

And Group. KLR Gail Nicholson comes you. with the next Thank from question

Gail Nicholson

morning. Good

When potentially think you job costs You what the further structure? reduce driving to do expense target does look structure done from the at structure at of the still where have a you expense of XXXX phenomenal kind can then forward, standpoint. guys down And Redtail? look expense you

Bradley J. Holly

lot Rick of Ross forward. for for going something and going the I'll do done outstanding opportunities of that. really to let company an we're They've address slides. on those we what a proud very thanks Gail, I'm That's doing. like I Hi, job, have noticing.

Rick A. Ross

about slide XX the what put of so pretty done far. on accomplishments we've our Thanks for And in some excited far. the Yeah. to describe we've question. We're page so

forward our categories there. operating lease to disposal headway, of of of one One got largest some think we've going to room continue expenses, of some in focuses produced down drive run good We our made which I is water. is to them

it – more, room I you're that we're of is to of increases but is downhole increasing it we expenses. on that A number and think made any two, good very the focusing there, Another two area does or would and up lease progress we've is things; production reducing having failures your that that there that benefit have. success operating it benefit uptime because run, good our reduces and

So couple a those our certainly, and across to but the board are to try focuses, of we're going continue push down. look that and

Gail Nicholson

And continue to When taking timeframe? XXXX-XXXX frac still then XXXX. stages a in where day from today are improve – you could you're versus do at you – that on efficiency of efficiencies to can do you the me then annual optimization days just looking, the completion like completion feel And the program an you're in standpoint? it that how of off side, on look basis improve, versus the many drilling amazes further XXXX number you that you the initiating going in kind be the

Bradley J. Holly

the diverter I that past, going during formation, the relates to already in to make efficiency, stages day, the that we're Yeah. technology completions gains, And as will But implementing And I that. to job. the on I not this as inefficiency the down We'll in think probably fracture pump the well got and the really on had we've applying pumping wellbore I help the already time. say year. In it some headway this to some per accurate actually comment reduce our good what implementing new know make and pretty we're the we And but we to I into reduce make of efficiency putting frac we've on midst is terms would and of think quote our some time. diverter to that continue year to intensity, complexity increase near on fracture progress. will will technology on that of slow that. are continued we going be that

earlier. to side good think of this to been we've we've our for able completions, frac year, a costs of as think to year, a ticket. well I flat as and the accomplish And on got that we're portion all initiatives that'll our I lot on well what good the contribute trying So, Brad as lock completion hold in discussed

Gail Nicholson

Great. much. you so Thank

Operator

you. & with Palmer. next comes Beard the Thank David from And question Coker

David Earl Beard

This like questions. you going time. the forward? sheet you're would be Venker's Would balance level relative you. just follows of on Drew color just Appreciate Any have Thank the the or color what operating helpful. level to debt, you'd on or any cash comfortable of

Michael J. Stevens

We more we even there, potential we've I down There's plan excess buybacks. generate think leverage cash. to to mean, We talked we've And lots it that by opportunities do we the with at there's do below excess do $XX, our our I about XXXX of with which means with use end cash more times. can have been At what pretty trying $XX. can can it. been, we share your that growth. clear we're things cash the you two with get flow of for can reinvest we'll current

at So we're generate, do. the prices there. make going when decision We'll we to We'll just we'll see that much happens we cash how time. what to what try best see and get see

David Earl Beard

Okay. Thank you.

Operator

comes the question David from next you. KeyBanc. And Thank Deckelbaum with

David A. Deckelbaum

Morning everyone.

Bradley J. Holly

Morning, David.

David A. Deckelbaum

of table to two, and side, perhaps that some asset about both producing confirm some as I then, all one, that process separate on know talked had comments the currently marketed upstream and Bakken previously made the wanted that's off non-operated right packages. midstream, now? And the sales the Redtail assets. includes you Just that you being And divesting they

Bradley J. Holly

a David, really upstream plant midstream clarification. the see the Redtail setup certainly field. We've in the benefited and Thanks great having Yeah, right of nice midstream together. joined from is the the question. that the middle We with really that for asset

better them see we there's so We together. parts. that And in of the see the going value sum

performance Bakken goes with that Bakken. with the improved the in the pretty We the hopefully what together process. with of like price. D-DUCs the We seeing happy We're significantly we've complete divestiture we're commodity looking that, are we're we gotten and and of and upstream We're We in the efficiency seeing certainly out out has better a that results. happy well think And netbacks midstream basin the it. of for total or the the seen. like so, that and

relatively And this at with that happy point. so, we're

So, not kind we're assets. currently marketing any Bakken of

David A. Deckelbaum

that in I Brad, clarification. the what especially just appreciate you've looked of to any the the years of And portfolio, now, of that on, have kind you you the would expand are to I as offset sort you acceleration commented, about and look here real management monetize Bakken and in how kind future of Redtail? kind or some guess developmentally thinking inventory opportunities are at look delever of as seeing beyond you the footprint kind

Bradley J. Holly

been a we're work the travel head And well. to I Bakken put get of the on to to to Yeah, there opportunities. pack and David, staff. with Bakken. competitive on of time. for work really it goal for the our that and excited. when to and get Bakken entire We're is when going move a in continue the up there, our the optimization, I going efficiency long to our very develop They've but advantage four at offices I excited look or And They ours people up field about those to I real know our is all us.

hands. call or ourselves cases, right that our opportunity. make in ourselves the opportunity all in valuable to to the that we more we position But we not. whether that's get be for that would position to to move Bakken then the point, have If company move else's want someone give that and So

David A. Deckelbaum

Thank answer. good a It's you.

Operator

Jeoffrey next with comes And Tudor, Lambujon you. question Thank Pickering, from Holt. the

Jeoffrey Restituto Lambujon

questions. my taking for Thanks morning. Good

first QX trajectory a here, range, quarter? on Just want range is later got maybe there completions or sure of for part the to just the the quarter. some the on seasonality on we've the weighted make the just to there are Is XXXX through risking or based focusing program, right

Michael J. Stevens

bit little A both. of

just and in X%. we're fourth a right putting put increase the season that we somewhat we're of you're about around quarter Williston off down the Basin the XXX a press think in And winter bit, the wells XX so being little know is only first release, in reason. we talking production the pretty in on I quarter, and the coming big

Jeoffrey Restituto Lambujon

then, I give picture focus guess year? split Williston Got you kind the bit? of through on those to or it. the in you And a a bigger of kind Should more move on some around show we the as where rigs can for the will what slide color anticipate the similar year, will move you

Mark R. Williams

of This Mark a the are Breaks fairly as now, a adding late Tarpon They're a out Yeah. Williams. considering four. couple across Polar, have traditionally have we'll early drill. the that got Walleye, that end to and of We're so the got rigs Basin; wells much We're we've going areas we be here of areas on spring, right is well. towards we Sanish year, in little we've Missouri the The later, primary summer. they're the focus. Then fifth pretty in more going spread –

Jeoffrey Restituto Lambujon

Thank you.

Operator

Thank you.

for questions to any more I the closing would Hagen As there present no at are like Eric call to remarks. turn time, the

Eric K. Hagen

Brad be at of Investor and time. I week for Oil Eastern now Investment closing March Thanks, turn March Howard remarks. That's to Time. XX, call over Tuesday, the CEO, presenting be presenting Energy will going Holly We'll the our X:XX X. to A.M. Conference, James And Whiting and the Wednesday, Central at Weil at the Whiting's at be presenting Scotia Keith. Conference Raymond at Okay. will Brad X, Holly, also IPAA April A.M. the on also Symposium Gas X:XX

Bradley J. Holly

Petroleum together Whiting's employees and of working shareholders So forward to for Board once to again I Directors, company. like I in to your great enduring look closing, an thank would make support. Whiting

Operator

conference attending The Thank today's now you. has you presentation. Thank concluded. for

may now You disconnect.

Chord Energy (WLLBW) 22 Feb 182017 Q4 Earnings call transcript