- Earnings call transcript Q3 2022

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Operator

Welcome to the Battalion Oil Q3 2022 Earnings Call.

As a reminder, today's conference is being recorded.

Now I'll turn it over to your host, Battalion Oil Corporation's, Chris Lang.

You may begin.

Chris Lang

Thank you. third earnings our to everyone, quarter call. XXXX Welcome, Kevin few colleagues our Officer, that like Financial Executive to joined Daniel my a introduce Officer, Chief our morning, I'd Rohling. have Chief of me Richard Little; and Andrews; our Officer, Operating Chief this This call statements. conference forward-looking contains

financial earnings of certain website. our to a call This are measures For our also description these non-GAAP and comparable Monday includes GAAP Monday. our of issued detailed to financial earnings conference Reconciliations measures. posted non-GAAP see references directly under most disclaimer, release on released the announcement our measure in contained

We published also referenced be may which may be found on during this have investor website and an our webcast. presentation,

followed it At to Now I'd like to time, over by Q&A. begin our scripted team will turn this to with Rich begin. a remarks few

Richard Little

loan you, growth us and a November last joining and start year, Thank we call. meaningful development to in mode back for EBITDA. and to production our term a morning everyone on In good quarter earnings mind, the of with drive Chris, closed company in simple goal to third new

wouldn't the With we on in of program the knew wells coming of back half this majority this the our from happen process overnight. year,

growth offsetting Today, more themselves. wells pad. key. was new than X-well nicely. decline first results production Then XXXX the fourth in as were So our and natural second quarter speak our Production existing quarter-over-quarter. quarter Volumes in patience first quarter the would production that of of on bring we from be the driving modest third for our production, the declined rebounded our over work quarter, to

pricing, and over hedged most base XX% to a a crude almost those average is the improved result, as X% production increased decline adjusted provided a morning price quarter quarter, adjusted in third second an also of this week, over our higher us prices. highest EBITDA despite production test. quarter. The Bone oil daily access in bringing That's of and our a average With the total this that's over XX% the the price important the quarter increase of to update oil million. commodity And critical second volumes in new crude excited drove XXXX. I'm XX% average talk EBITDA recent environment. since together about we realized shared year, increased Spring with with second up our to $XX.X the our entering for volumes that's XXXX, news Our earlier

the that acreage work subsurface in bit year. be producing will would are early, wells is quite Wolfcamp well to inventory.This on from focused continue us, be area. allow our could Spring zone to around close long a While and increasing felt go an Spring this year, for on our derisking potentially as way a successful, confident out appear and line this that test results us we and We to production our shift of closely a development several acreage. while still with in Bone multi-zone test watch performance our we'll productive well further This important is Bone with the own to

complete a update our We next on more have call. expect to

headwinds forward, it planning caused we the uncertainty. ourselves with a and to political such economic once markets, find Looking again, intention commodity in

but new work the to we As always, we capital enter year our we will to remain budget, with confidence. expect finalize XXXX cautious as

the two of year. brand-new We online the X-well way wells October the end have before in on brought more was a that pad and

on nearly record continue have excellence on and and a over to $XX display we crude test Bone the operational We on only quarter results, price improve XXXX And improved completion by weighted been underway average with our performances in Spring promising drilling strength in early strike efficiencies. has per as new as our averages. increases barrel our financial year fourth XXXX our swaps

of growth our to suggests continue through into this of looks All the prime story and fourth quarter XXXX.

little it to now. color pass let off a operational me performance, Danny more For on

Daniel Rohling

I'd performance in our start Rich. to and by once like again you, Thank spotlighting completions. drilling

These side, drilling largely in of the as improved our offer that seen images day, which per meaningful and cost elsewhere. to structure offset driver stratigraphy, provide its I'm been has to geosteering. to subsurface in say mentioned drive selection detail year. lot our that year, our better foot On faulting a I and remain seismic of that drilled a footage planning, have drilling efficiencies. well cost new efficiencies, those major Draw. team ability this critical help happy third increases regional interpret the and we has we quarter, geology A new To down subsurface have a received this that zone per landing helped a for been we of on data impact in keep through our improving plan and quarter to done understanding driven the ahead by and enhanced work improvement understanding project last ultimately we study Monument our and of attempt

completion to we this arguably has key It's pressures wrecked shortages with that in that team industry mitigating those well the efficiency, material has secret D&C the for and hit attempts Thankfully, have continue oil performance side, we most. pump to suited any our been on inflationary gas activities inflation. and being at and an improve been we challenges, On and have year-to-date that the a and successes once year, cost downtime. reduce area again, our quarter-over-quarter labor push havoc increased on as no as other project

on safety is I'd and midstream time, received project. Surveys we give and facility and equipment quarter our results. on AGI the well the focus expected remain like is line. I'll to despite track and first all time side. where comments date the on be industry end underway. with close on on our of EHS, on by Construction continues a work the and that to The complete responsible has under brief to hit delays, in to uncertainty drive operating on are shortages and strong to Moving an is dirt construction update a is a few the faced major and year. the expected facility in-service relentless material

another at our quarter no remains is X which, TRIR in Our incidents, recordable after industry. rare with as mentioned, extremely

spill We fourth our consecutive the for also, water. quarter, and flaring intensity reduced and for produced oil rate

that, impressive mode. were markers three all active stand-alone, X them special all are while While very we accomplished is continue these development in make what of

Kevin is walk results. through financial our Now going to you

Kevin Andrews

for year, XX,XXX coming X% of XX,XXX and second per day Boe Boe second as the in us. joining the compared everyone, quarter day morning, third in per production thanks at quarter. Total increased the nearly again the Good over to during quarter

second represented X-well another revenue was in we XX%. the production increase quarter. week week, brought of during second new the to wells pad in program the beginning As next quarter first third Rich that X which X-well the and our quarter drove and it’s $XX.X oil expect third the million, put Total of and the ramp in continue pad the October of mentioned of wells online these earlier, capital With from production into through flush to we recently this production the in end XXXX. fracking year a online the

by approximately previous price really increased overall Despite and an falling helps prices, realized this of between hedges, product We crude have average quarters, an nearly production oil outproducing prices our decline seeing net average quarter in XX%. talked benchmark our and of second how hedges that. illustrate about third quarters growth, will with important XX% in be the our

to $X.XX EBITDA Our online growing production, improved drive coupled trend the swaps of pricing $XX.X $XX.X fourth average in on improved quarter quarter. crude adjusted an of $X.XX After in net share. $XXX.X in $XX October, million and EBITDA including improved volumes price fourth of of already realized million net $XXX.X reported and XXXX of financial items, A derivative net shareholders growth the adjusting our additional XXXX. unrealized quarter our million adjusted per more results. realized diluted in on With of adjusted common for in the this And price. nearly pricing effect helped with our the second we strike oil average and increase XX% the barrel to per the diluted through third per strike this gains, income reflected million comments company expect or quarter few share. quarter We for third selected a weighted to the income into GAAP weighted continue over

our For announcement. details adjustments, please of refer these to earnings

than to accrual Based $XXX.X quarter, development gathering like to we On our wells development activity, million with gas side, release. infrastructure. basis XXXX $XX.X expenditures ourselves would XXXX in related oil the through oil during oil can of we X in and drilling are quarter, related guidance. the capital which found online on find October million support and we an of we planned comments to a to details result total $X.X $X.X expect gathering treating $XX drilling With of million total of production million our gas our and related months more and activity guidance D&C our total be infrastructure. are and what earnings support These online CapEx related cut. X end fourth equipment completion related $XX.X of related reiterating provide X incurred as few assets, XXXX we our to estimates capital come and to a lower the to our for treating brings slightly on capital our on also but to nearing in and This million equipment and reducing program. expected production, December, and to oil million I CapEx of the the third of

was the delayed liquidity loans Loan XX, the brief million At as of drawn of consisting million recent of the At cash however, time, not under provide September Now company of our current ratio be XXXX, and had capitalization comment on under Term in I $XX the Agreement. company available $XX.X well close compliance Loan Term will liquidity with draw a requirement Agreement. enrollment as that $XX.X the term loan. with million, and to the in term

We Term modify current to amended the decreasing the things, X.X:X.X including, Agreement from among ratio certain provisions, of have Loan XX, since as XXXX. September other

Battalion was result in current a amendment, ratio September quarter requirement with ended of the As the compliance for XX, XXXX. this

back remarks. Now for concluding to I'll it turn some Rich

Richard Little

Thanks, Kevin.

third But downtimes bit our of curtailments, of said bit little a with incredibly in our Supply able we we delays chain lot to industry this we've midstream a proud on work, disruptions, of and a chaos results. quarter patience what have do. hard deliver and are would caused little been of We year.

in interest positioned and note Once to enter find high and on is XXXX going our And our to thank remarks. production operator a a facilitate you turn for close again, so out your of scripted it ourselves well we I'll flows. cash the from building back Battalion, strength. Our now the year position that's conclude to and to Q&A.

Richard Little

end progress to you. the our AGI in go to progress we're excited Thank hedges year-to-date. lot XXXX know jump We appreciate want in ahead pleased again, Okay. continued quarter realized do your the big we'll happy Very with then We're have that with our third rolling just on be with our a just and as and forward the I But that about a the off. call. growth. and project pricing interest production to XXXX we let With results, everybody Battalion. looking

of lot appreciate and your So here, happening you. interest. again, a Thank we good things

Operator

does participation. ladies today's appreciate gentlemen, Thank conclude that and And conference. you. your We

Battalion Oil (BATL) 16 Nov 222022 Q3 Earnings call transcript