OAS - Earnings call transcript Q1 2020 | Chord Energy Corporation

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Operator

Good morning. My name is Brandon and I will be your conference operator today. At this time, I'd like to welcome everyone to the First Quarter 2020 Earnings Release and Operations Update for Oasis Petroleum. Today, Oasis’ management will discuss first quarter 2020 results in the current environment. Please note this event is being recorded.

the begin to the turn Petroleum's Lou, now to CFO conference. will call Michael over Oasis I Thank you.

You may now begin your conference.

Michael Lou

Thank we are financial morning, everyone. first Good XXXX results. and you, quarter operational reporting Brandon. our Today,

meaning we are statements and today Tommy the advised Oasis include joined of that Midstream to I Please on within remarks that Taylor by you our Partners Nusz on We Litigation call. believe delighted Securities both forward-looking am Reform our Reid. the and to be be have Private Oasis statements Petroleum Act.

have well We our to statements Securities are from and forward-looking our in to earnings cause any matters calls. These in described could XX-K disclosed filings include we our actual currently Report to as XX-Q. subject our earnings Exchange update different risks and forward-looking our materially on releases, risks Form uncertainties disclaim conference and the others, Those and on be Annual Form that included releases Commission in statements. results obligation these among those reports with quarterly as that

we make conference our call, be releases in and our GAAP measures will the this reference can found measures to earnings on and reconciliations During to websites. non-GAAP applicable

call, hosting Q&A be needed. not after will We our as team session but during a will today’s our call available be

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

Tommy Nusz

call. morning our Good joining Michael. for Thanks, thanks and

our both in today, living the have we release noted by press and our greatly lives as we our unprecedented pandemic. As COVID-XX are impacted times been now in business

of oil. was of oil which oversupply by the compounded a destruction seen sudden historic global have We demand,

team to put have lived did in be we anything – cash activity flow While protected an years power and that within XXXX is orderly capital prior. manner flat by as prepared cash we as hedges, to this knows flow on held with dropped convergence seen, volumes activity, we we unlike forces able our to market down in be have we that of ever

calls for and immediate environment measures. macro the even drastic counter now But more

communities just healthy. protect to been We transitioning environment and rapidly safe and while employees, contractors asset to are striving We’ve base. business this into our strong keep our our

we guidance of that well first were spent strong All CapEx below we production midpoint our above our were deliver said, a and the quarter able to being where projections.

also free We put plan strong the hedge cash pricing our have capital to to to position together of support remainder be and assuming for positive worked in reduce spending flow XXXX a us the of strip position. our

Before Taylor, a to over turning high-level to wanted I provide our on few call performance. the reflections

asset as efficiency cornerstone have the improve development past capital capital cost. lowered programs over operating our remains we and Williston and seen the significantly year First, we optimized and

from improve XX% job continued visibility tremendous to the drive in nearly lower. to reducing well has the cost took when team years driving cost and the over drilling well down we Delaware, Second, asset two by done cycle completion efficiencies, even we and times ago a and with

repeatable investment deferring activity asset the are Delaware in the the environment, growth a current we While when improves. position drive to environment in capital capital-efficient is

Midstream a Oasis. differentiated advantage our provide Third, to assets

XX% approximately of and our the state above XX% Wild compared well project and XX%. industry capture gas Basin of an area record XX% had That’s requirements of in we quarter, to first average gas the of During our overall.

the transitioned earlier price in Oasis year. quickly to Fourth, response declines seen this

allow activity down build businesses team oil that leading through Oasis has power to no essentially in the with gas and to experience contracts flexibility in contract managing exposure. orderly manner an the management Our cycles had us

events been environment. operating in The this projections. volatility recent an earlier current and year capital future exited uncertainty oil Well have extraordinary, and the consistent effort price with reduce Services business to and ongoing expenses have to the operating and macro administrative Lastly, we be driving operating

oil the come economics in to continues cycle by just $XX that we is capital activity supported at answer have be price a not world, is a One of that to projects inventory increase, questions would deep the that simple. in of which $XX up while will reporting WTI this the

we business event. a that not is, we liquidity, operating be control, overall dictate, means move time, when triggering look structure. cost reasonable to driving conditions can cost availability, focus the differentials structure, product ability both it we’ll it price, at way that, our continue getting will oil mean base service focus the mean on I our at market and on The What asset with margins. single a to WTI plumbing and In capital, what back of the optimizing and relentless is to

the that, turn With I’ll call Taylor. over to

Taylor Reid

our on believe Oasis positively here drilling Oasis this the and to overall are shaped comments operations team both reacted has the value Tommy’s echo has way across basins. Operationally, at improving our and I environment. priorities system efficiencies

pricing to As ways for to for the better environment the improve continues capital keeps environment. returns, evolve, value drive looking a while and retaining asset team productivity

the QX design improve when with continues take and of capital we helped of and goal wells online. well six by costs levels. spending expected, future. well team In expected trend the lower and DSU we times Oasis wells weather, efficiency. lowering those XX frac winter enhancing cost productivity the The This completed brought cycle below were driven to and up activity and Williston, than evaluate in Despite strong

to Delaware, We delivered quicker in record us allowing than expected. get cycle zone well the times

to our thousand were optimized progress well of in cost, a significant wells lateral four-well which X-mile improvements low-to-mid Through drilled made year in for in a last completions, coming the well design a ago. million, pad. at XX-day below reducing target couple range, Our the hundred XXs we’ve and $X.X which is compares

expect Bay. Wolfcamp program. is development being million our to pricing projects $X have DSU design being full Springs well last drill to progress cost the Bone the would last move and around made been is in in and push continued three we year deferred, we both when restart activity outs the While through well We the and

productivity a Basin Delaware forward. above four rigs asset in each is running little confidence us trend this our of planning and in our gives which going the encouraging, been year We basin. has performance two expectations, Well began with the high

have dropped. crews been Currently, all and rigs completion

our allowed capital contracts expeditious activity liquidity to flexible and drop preserving positioning us an orderly ourselves merit. conditions manner Our when and power backup in to

began capital retain deferring cleanouts before market. the as March adjusted improve we and we April, preserve value volumes when served and began these best completions to and let in improves. to pricing In to for shutting production Additionally, April in and bringing also pricing voluntarily we economics were

curtailed Williston For we in XX% production of the Basin. month, approximately the

to we May, curtailments be For higher expect April. currently than

volumes However, back quickly. Oasis flexibility has to online bring significant

and respond based pricing Williston on will where from has we value month proposition. fact, the improved materially In ago were a Oasis

team we working costs, or wells are been operating impressed on is reduce reducing capabilities to our are and always I team The have diligently of the curtailed while shut production cost. laser-focused in. by

We already on levels. equipment, versus XXXX seen supplies early to XX% have and prices decline services around XX%

of far production Oasis not conditions this completed, set when the core both gives us the of that in with have combined year the XX quick Delaware brought been DUCs and built improve. so response and when on robust but Williston XX wells production

response quickly and XXXX. back from had price a the the our of and the of To capital success close, decelerated rapidly we in had moderated strong working quarter, the to team. building collapse. home am responses adjusted cost I proud unprecedented program, They of our first half production upon a in cut to Oasis

will challenging macro to we environment the That even do ourselves to more. continue change are and said,

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

Michael Lou

to XX% to until by be conditions normalize. budget protecting market, The below value cost $XXX We $XXX original Midstream power E&P its and Taylor. by expect reduce now approximately team Thanks, of to is volatile XX% to execute And operations asset It’s well. is Oasis CapEx doing down is and other team continued certainly a our million. to activity the but deferring XX%. to XX% million everything in

We volume guidance, temporarily our are Bank current recently given the environment. Spring redetermination. suspending We completed

to commitments $XXX borrowing total XX. on million base and Our April elected reduced were

$XXX XX, drawn March on the million $XX facility As Oasis of and of million had LCs. we

forma the begin million. down of to in after adjusting capital We had half giving borrowing second revolver of pay updated program, pro cash we the Oasis, XXXX. new net $XXX liquidity million for to base expect of us our With $XXX the to

During balance this quarter, from by during of XX, in an XX. the as prices March took of the we to $XXXmillion our senior sharp based on first seen the Oasis year quarter, billion the principal largely charge March impairment $X.XXX reduced total Separately, quarter, taking decline to XXXX. end unsecured notes the

Oasis in and our has can but never More taken periods, prior quarter’s XX-Q. a in based sizable details found pricing. on proved impairment release appropriate reporting charge in be press is charge our market this

team specifically workover and do cost, below continues back expectations. BOE wells forecast brought good various are quarter, such Oasis more job shut-ins. downtime. But subsequently of is the when electricity and the difficult are attempting and GM&T and LOE averaged minimizing minimize costs, a levels online. managing to as well first per to to LOE for with operating $X.XX LOE shut-in

team is on the all basins. wells producing cost in Additionally, hyper-focused across both reducing

We manage continue G&A closely. to

quarter business. first that of we quarter charges and operations included last Our Well Services as exited our of the some related business

will for in to business to identify spend with expectations on and we in earlier both and continuing E&P ways the are and Midstream Midstream below that G&A are Otherwise, expectations our E&P with line execute and our expectation lower we spend XXXX. our

to highly crude quarter $X.XX discount lower market Regional $XX per discount volatile In was trading well. at wide a Oil as guidance to averaged first April, been our Williston in the have off the within WTI at of range. differentials trading adjusts with early barrel demand. differentials Permian as WTI over

and a WTI. However, Williston crudes this currently trade dislocation to premium was temporary and Delaware at both

the Our our impact marketing and pricing. in temporary April overall team crude great differentials continues minimal do job wider a to had on

Our for hedge remains robust. XXXX position

crude appendix details remainder the can and vast found our We be XXXX, in investor our the have hedged the of for of of presentation. majority

To volatile, protect lower but is the reduce is environment to up, working asset diligently Oasis cost spending, sum value. things and

bring activity wells the increase and online the have to appropriate. flexibility We is time when

over for remarks. I'll to that, closing some hand back the Tommy With call

Tommy Nusz

cycles to Thanks, in and In many this I’ve is it. uniqueness my its has Michael. different certainly seen career. Each one closing, one

to don’t to thing sustainable that and ball and will affordable, hopeful for I is the predict there an is next what reliable six am While like, energy. have heal one appreciation world crystal for I itself months begins the a recognition twelve to to and going increasing look be

emissions footprint. efficiency, leading check to to Oasis’ out profile, gas to management continues website on improve our our would sustainability strengthen and and more our and initiatives. already Greenhouse you manage I for encourage technology cost our environmental details Oasis leverage structure practices

our to recognize of like continuity challenging entire the support business truly providing maintain over the they months to in would those very done organization, amazing. have effort I a well two is as environment as extraordinary last us what around

Thanks again for joining our call.

Operator

today’s you is attending now Thank presentation. for concluded. The conference

You may disconnect. now

Michael Lou	Chief Financial Officer
Tommy Nusz	Chief Executive Officer
Taylor Reid	President and Chief Operating Officer

Chord Energy (CHRD) 18 May 202020 Q1 Earnings call transcript