CHRD - Earnings call 3 2021 | Chord Energy Corporation

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Operator

Good morning and welcome [ to ] Oasis announces OMP to merge with Crestwood Equity Partners. [Operator Instructions] Please note that this event is being recorded. I would like to turn the call over to Mr. Michael Lou, Chief Financial Officer. Please go ahead.

Michael Lou

Thank you, Nick. Good morning, everyone. a operating along and providing quarter certain are preliminary XXXX financial we business with update third Today, metrics. believe of other Reid We're our delighted remarks meaning include Partners, within well on Taylor Oasis Petroleum that your questions, including call. I'm on statements Securities the we as as Private the Midstream joined today both statements be to by to Danny our have advised forward-looking members the Litigation of you the be Reform and to team. Please Oasis Brown, that answers Act. to statements are from and forward-looking our cause calls. These could disclosed actual currently to subject earnings different risks materially uncertainties conference and be that releases in results those as among we the our Those with XX-Q. described quarterly including risks Securities and that matters Exchange Form on others, our annual XX-K include, and our Form in report Commission, reports on filings as have well our in earnings releases; any these obligation forward-looking We update statements. to disclaim

reconciliations non-GAAP that, call, During releases we conference presentation, and with may our our in be and the find this GAAP also over reference on earnings call current can our websites. on will to measures which our turn Danny. investor found We website. And can measures; to I'll reference to make you applicable

Daniel Brown

our morning as top-tier best-in-class amazing Good preliminary position. for and this focused sheet transform team start merging call to third which of Oasis you operator into their work results. I'd all, E&P balance by the inventory a thanking discuss entire Michael. you, enviable well for quarter a Thank to the Oasis Partners year, with will Equity OMP thank and joining as our into like Crestwood

our like also I'd employees. all of dedicated to Importantly, OMP thank

you enter of. the your organization, Thank a very into you to in Partners as Crestwood, highly build we're fantastic Midstream OMP hands this you midstream OMP be will we because helped grow as our a also as with all their operations which to believe that operate Oasis for a phenomenal including confident into ability midstream have outcome provider success well. of helped key It's which a with respected view good parties, we're be to one customers and We able for valued who OMP. trusted volumes dedication efforts transaction, Your their midstream and should and in as proud organization.

latest deconsolidation in series believe Our stake the We of a of Board marks in cash over better and combined Crestwood are announcement statements management transaction taken of Oasis important an the XX.X% in the will valuation Oasis' to of have discounted the and action sale embedded share Equity, with the strategic value our in strategic our ownership of merits OMP million resultant position of attractive most unlock price. The actions of OMP investors, business $XXX E&P will one past and the which of the year. the at highlight to compelling. our strong financial

Oasis First, cash Oasis $X value in accelerates million approximately $XXX receiving per share. the merger about is to or shareholders.

Crestwood. receiving is addition, In million Oasis in XX units

results E&P financial historical After impacts properly increases We than our be after which everyone help EBITDA, no to will accounting equity other debt will our mean consolidated believe confusion calculate with sheet. our method, merger on how report the be Oasis. EBITDA Crestwood balance will Therefore, Oasis this Oasis' closes transparency about consolidated this Second, versus with the valuation. the so no for operations midstream with the consolidated will will of transaction value longer around eliminate midstream no E&P should OMP. ownership with close, reporting aligned

participate market. tax optionality acquisition Oasis and to gives balance no as an Crestwood our the plenty and completely Third, for supply initiatives. as strategy XQ consolidation. us help ESG of strong of as limit of transaction, transaction finally, in the believe with leverage. Fourth, We progress well sheet transaction the the purchase forma to earnings as further position. continue plan focused outstanding. Fifth, its XX, us relates will the water. transaction sustainability entity on September possession of upon believe that to and to shareholders in NOL objectives utilize value again close information, unlevered. allow that This reduces place has of it the and industry to trucking biodiversity, Oasis' than the and Pro the forma be of of eliminate position subsequently with information, to chain in extensive once allows and expects prerelease Oasis and company the Williston to flaring the will will thus aligns pro of greater ESG We allowing X% its have edge leading this longer enhance build that Crestwood shareholder an Oasis' should been preservation material a the open material network with in nonpublic conclusion it'd OMP X-year shares Sixth permitting reductions, oil of infrastructure Oasis August is diversity us work Crestwood benefits of action ESG XXXX, shares the to and inclusion, Oasis together put in disclosure. emissions process on methane and

to to turn long creates holders Q&A. Basin. about regarded, provider. with on briefly a turning The provider performance equity large Oasis' it over excited becoming to midstream Williston Oasis confident highly midstream all merger even it looks relationship. I'll third is before and They're Crestwood beneficial entity midstream footprint and over with and hydrocarbons and of the preliminary quarter a portion operational in touch our to produced large the customers. to diversified water are Crestwood and feels for an partner handle is right OMP announced now Michael stronger a We operator forward largest a our

Michael Lou

but earnings external were expectations. this strong on Thanks, across total replacing free announcement, third internal operational An with be with X, we're results the for and flow, the regularly will provided preliminary financial production, board November flow and Danny. Concurrent quarter scheduled with items. abbreviated cash results merger release call. Results capital and certain cash quarter Oasis exceeding the third press both published call

million per fell expected transaction well day Third expected of the pricing of million. in the our schedule job other our as to acquisition interest exceeded in third to services. operating to quarter. in timing and Oasis X% oil both marketing $XX barrels to quarter continues from volumes essentially $XX guidance -- items, the for items reduction multiple our below cash just working quarter, differentials for with but in The at factors in expense; processing our G&A spending to guidance transportation a expenditure guidance timing were Oasis of this efficiencies, preliminary team our production gas primarily guidance. strong than expected capturing do midpoint its end reduction original below Adjusting of $X.X And lower was XX,XXX the capital strong between of release of X% cash quarter benefited again following by interest end is production value second that related quarter. midpoint. Capital XX,XXX midpoint range the the of of top is the be the guidance oil working great G&A guidance. and reflects and guidance. of the of line in midpoint million above reflects recently per the day approximately quarter $XX and lowered updated closed as driven by BOEs impacts consulting of in the both press guidance third and Williston million fourth The at both which million $XX The certain lower a wells. We I provided million includes delayed series costs gathering, our of $XX.X and commodities. Lease noted. announced these related to E&P E&P to the

wells the That Additionally, some Williston the and the on million. paid population quarter at expected $XXX quarter. guidance. track the lower Adjusting updates now during asset outproduced slightly well for planned, meet for wells in planned, fourth are final quarter, third remain drive during the the in aggressively seller in the produce This expectations. asset fourth to These original our reflected our the levels helped to this, completed quarter. now expectations of than lower-than-anticipated price to our is third recently we previously those managed

approximately which reflects million, we full expect average XXXX, to day $XXX year environment. current pricing continue per BOEs with about of service XX,XXX volumes For the budget of capital a

our expecting XXXX prior share are $X.XX thoughts capital to fixed inflation end formalize $X with into the impact update dividend we'll or quarter year and We accelerate to of and plan. Consistent through increased next annualized. share we XX% when per per per on its Oasis indications, the the our year,

as XXXX flow and We expect XXXX through to of significant the generate beyond. cash free as well rest

repurchase both focused on it its that, delivering for will We've and for from cash quarter program bolsters Nick sustainable free over best year-to-date. substantial you've today's We very share our us authorization. In continue balanced touch on strong I'll financially, announcement of is flow. million Q&A: Oasis competitive summary, cash share approximately and evaluate operationally to I'll further to questions. approach and remaining on the a handing before briefly as was a it million back our over program $XXX seen position. With $XX use turn And repurchase it got pursue

Operator

Instructions] of general Gap] over the comes Stifel. [Audio last Whitfield Gap] in First question from Derrick year [Audio [Operator

Michael Lou

you repeat that that? of your most Derrick, question. we missed of first Can part

Derrick Whitfield

Sure.

update your my progress about opportunities? was the the a So over regarding and ability With current year. [indiscernible] question, the the going enhanced Perhaps consolidation. congrats help industry question really wanted on participate liquidity and first to say for market frame just in in last you could I Williston to ask value-enhancing I to Oasis'

Daniel Brown

Derrick. Danny. is Sure, This

across got the broke -- question, during you I a up but there think of gist little look we I As think bit the it. I

As the perhaps -- publics other opportunities, then their may of relative and be where, competitive I'd basin, at private continue the portfolio, to less both they within the landscape that opportunities across to well, see Williston obviously publics. we say, -- we look position they other have; opportunities larger including as look both

with size; would there organization. help aspects increase an consolidation opportunity scale, industry value so investors; our relevance to for all those, us additive be around is we and all in those our And our the enhance think of that

And across multiple and see different so we're in areas. landscape looking opportunities the

Derrick Whitfield

QEP shifting the to assets. then over And

your you'd how this activity? that XXXX to Now you closed share might your direct you capital on and the integrate asset first plan likely your on latest where you've could thoughts acquisition,

Taylor Reid

on looking in XXXX. We're group and a completed activity that assets earlier our year, Derrick. that this drilled were at wells new actually of Diamondback was capital pad. we'll first would year. Yes, to to drill operate and likely QEP There the X next the drill wells there's And most complete on additional are probably we locations location, between that so Disco that ] somewhere permitted, [ X ready by that

standpoint, opportunity operations really assets. an So be that From our integrating know; additional on guys that practices think -- as the will applying that closed looking assets; we'll front to same I first have some it, the we're at we some activity. our down drive costs on well. drilling you the of And as apply

Operator

from Next Neal question Securities. Dingmann, is Truist

Neal Dingmann

what a consolidation. maybe, question, Michael, my you, little Danny, for bit -- My That's asked. or on on Derrick

You obviously, and just the shareholder return. combining Danny, of been guys -- that you you potential potential of of sort talked good obviously do with consolidation. And the for you that return. have together a mentioned I'm How job dividends kind about mix, wondering. all shareholder the see tying doing notable

the as So shareholder just well things How do blend if I'm those you all you together about of see sort wondering. of consolidation? you when returns the as deals think --

Daniel Brown

Yes.

about I to and think both I as -- and return think of indicated, Neal, return -- we've we on committed we're capital. think as it,

And the of with over that's piece that so And is special to share we've us. demonstrating we important dividend, out; return we've hopefully, something -- got. and been it's the buyback the program increased; time we've really that paid

evaluate So do as forward. opportunities we'll continuing to and do that we're that we move to committed continue to to

think is participants recognize that we is important consolidation continue needs happen, be it's to in consolidation something we I ought that. to to broadly that industry also -- and

and or benefit by look see shareholders approaches. think by we shareholders, returning value are accretive capital enhancing actions actions to so we'll as take that we value-enhancing doing both opportunities think, them directly to And to I of that those either

but the And I standpoint, think capital that of we're we'll so continue very is a our be strategy. very, -- to component return of key balanced from

Neal Dingmann

into let's what follow-up: mentioned then comments What just you'd wondering. already XXXX. just just costs. Michael, on that about changes XQ? -- just we've you Great And you and of end the seeing maybe now you thinking, I'm say, I'm today are than [ incrementally saw in are you one just wondering much kind how what ]. of service seen the

Taylor Reid

Yes, Neal.

from operations, So news board. year, service in those offset with so Good far some different to not we've been drilling cost operations, across service a increases of across universal cost is, kind perspective, pressure, and able this it's seeing both segments. definitely frac efficiency the but

definitely As of we look you're into can XXXX, Labor a of that's [ but we said, the going going maintain that to as ] of been but bit -- kind across through start seeing year, really I the I pressure to think so show to is has Trucking a seeing offset that, to far. we more the think really look able we up like been we've board. end it. challenge,

likely XXXX you're get think we to going the see year. the and then into I of increases as through end

Operator

Capital of Johnston One. Phillips from is question Next

Phillips Johnston

guys to next to the quarters Crestwood of possibly seems a term? value long there's will look units sort you those was that there, but via those some the hoping Oasis address this dividend? own either option hold you you distribute an directly some XX guys asset or It Or forward. that is of you I plan expect Congrats. obviously for we units to shareholders several like over the sell-down going million over would could should the units

Michael Lou

the Appreciate a It's question. comment. good Phillips. Sure,

deal the for things. an is think we I incredible for really So all we the think -- parties. way couple is about think this a deal One, of

ways build, from an goes this deal. get of So looking perspective, of same from and OMP, Crestwood lower then that have it's full in deconsolidated. think that. much of a that. stock, liquid We'll perspective, kind And we an of ways kind long thing. do to more we've accretive been and be the a We'll for value, Oasis kind size scale, larger-company read-through a to kind position

So we deal. we be I position there, unlevered this with -- type is of So fully a balance after think X deal, the with we have a We'll a right? fantastic. have have lot lot debt in that, a sheet options which net basically of

So have of off real we nice some flow provides right it, it dividend but needs any a cash don't It away. us and provides optionality. still

great We're Crestwood, going want being comes we think the capital a up as as very that that great with a great -- and partnership flexibility Now be, have we a better place see we we that strong to said, a so actually investment, we stewards. opportunity be that's see those to do with things also if but shares use. to

at mind. And can that that ways so we're looking can we things and invest different as that do, we will on be

with Now we also be nice structured to Crestwood. flow. going generating own program. said, of that program their ton they buyback have They're share being a And cash have a free

sides. that Once companies. the again, with We looking in them we're if have win-wins to work nature ability benefits both both for for that

stock. for have long-term going We We provider pressure. They're love great they're no the and love company We the be us. what a doing. to

Phillips Johnston

anything or Okay, that? like XX great. there or any units, And restrictions on are those million lockups

Michael Lou

them. on lockup X-month a is There

Phillips Johnston

And return capital just just one great. then of front. me, Okay, more for

million the program. mistaken, left If not I August. you there's on million said buyback early from $XXX that's $XX I'm unchanged think

prevented Just active more wondering what's you kind from on front. of the being buyback

Michael Lou

that. many you got announced, Obviously question. imagine, open this kind as didn't of transactions nonpublic Diamondback the got we be if one the that, just do material have to that as -- that know and we've to as as X with just QEP deal Crestwood able that well you'd closed Great windows

we've now. I obviously We transactions noted forward. those getting have think quarterly anymore what going we're don't information restrictions announced. that got those We've here is

Phillips Johnston

like I that. yes, was but something Okay, assuming

Michael Lou

Absolutely. Thank Great questions. you.

Operator

question Markets. is Davis Capital from Petros, Next Instructions] [Operator RBC of

Davis Petros

at kind deal starting all of of I'm kind kind were XXXX. $XXX million, wondering Just [indiscernible]. I million on of back this update just one. NOLs color post kind you guiding front? what Any in of is $XXX a XQ, the quick know, of and that

Michael Lou

yes. Davis, question, Great Yes.

that think kind of, end million-ish deal, let's say, of at this I were NOLs still year. we the before $XXX the of expecting

across a with Year? kind Et New cetera. And the transaction, that after it timing be that cash it substantially right closing best it going Is transaction's with year-end on be but obviously, close. of that, of of position. NOL. the depends likely And will the NOL we'll this so comes And the against NOL the most then of about use is at is are We're away talking protecting looking using way transaction. to the of tax plan go Crestwood that with will that we kind that what is the

for So of the that Oasis. means position from that that using we'll a be kind NOL tax whichever way in is substantially best

Davis Petros

And Got of drill a you've maybe that you're or any struck it, your of or deal have Crestwood going carries of move contracts Is year? operating change activity to just with your quick to kind with there costs kind next follow-up: okay. this midstream around some to that any kind

Michael Lou

real but no of changes the a and Yes, no additional things. kind no real We area. on strike question, good It's changes. did a Woods deal Painted

of really E&P we that should front. so deal, working that, intentional very had area of right great that of than been we've side about know through this Great change be things, with visibility that on to what costs, nothing. showing first simplification talked but the them happy changes have capital, in process. on E&P area, that You'll E&P that of doesn't G&A. a you with We've refusal about. It kind None other

Operator

to concludes ahead. Executive go remarks. Chief our question-and-answer turn over Officer, to the Danny This session. call Please closing like I for And would Mr. Brown, back

Daniel Brown

dedication. Today's business opportunistic milestone Thank highly their marks our employees you, and all the want be important in and hard competitive for Again work forward. announcement of to moving I Nick. an to thank restructuring

cash business, do. to sell-down Year-to-date, and by merger said would in was accomplishing Oasis take months today's is accretive restructured supports free in our we ways, we've Operationally, efficiency XX% many our drives now I generation. proceeds. attractive a reduced Oasis flow perspective, From followed merger highly and partial our before, position midstream announcement. its Permian quickly for Williston years normally which increased cost scale-enhancing while As production base divesting a which portfolio structure, a it sustainable through what significantly

management shareholders. published August. implemented progressive top-tier program And ESG also compensation in aligning with with governance in first very call. a future with and you thank The enhanced report position a program of and a a is an We organization value-enhancing bias transformed our sustainability our incentive we our Oasis action, focused our towards joining that, looks for exciting. With today much transparency enviable

Operator

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

now may You disconnect.

Chord Energy (CHRD) 26 Oct 212021 Q3 Earnings call transcript