CHRD - Earnings call 3 2023 | Chord Energy Corporation

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Operator

Good morning, and welcome to the Chord Energy Third Quarter 2023 Earnings Results Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Michael Lou, Chief Financial Officer. Please go ahead, sir.

Michael Lou

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

cause We our include and you today have answers advised are to forward-looking delighted including and statements Private remarks, materially on those Securities Act. and we the could These Please Brown, the the believe uncertainties Rimer, that our be the of your by risks Chip Litigation conference call. to of statements that results meaning Richard within subject different members Robuck, be questions, other to currently team. forward-looking be our are statements to disclosed Danny calls. actual that joined earnings Reform from in I'm releases to

in filings as as reports We annual our forward-looking Those obligation risks include, on the among with report and to XX-Q. update others, Commission, described earnings in on well our matters including our quarterly and Form have that Exchange Securities XX-K our statements. any Form releases disclaim these we

this non-GAAP may the investor measures, make can and and reference reference earnings on you We current which conference on find also can website. to our be releases our to GAAP measures website. applicable may presentation, reconciliations call, our During in found our we

that, Danny call With I'll over the CEO, Brown. turn to our

Daniel Brown

quarter busy of a third up Thank very Q&A. some few open a our the in and call morning plan our XXXX. morning our call. Lou. and give everyone, more briefly key little detail Michael. vain, other recap small I additional to to that it thoughts of on financials, then Michael touch Good for initiatives color the passing you, noticed preview We'll and a thanks on for a topics on and before organizational to on He'll our I performance joining some

XX original expectations quarter quarter So pleased driven The wells strong I'm than wells our quarter half performance. continued entire our original the exceeded and was acceleration which the bring scheduled that volume ahead higher and Chord third to year. year in third announce online with both the the in reported first yesterday, raised results to and Chord entire brought production significantly online team that, of worked well XXXX third full of outlook. XX by together expectations

is accomplishment X-mile increase on This XX% amounts basis in a half more impressive well the in delivery even when a evaluating to time. equivalent which

So very went financial robust production, strong to Chord's like the work the high I'm free supported all shareholder I'd by flow that proud Underpinned our the performance quarterly say into team, cash thank to hard and you, executing of program. returns. and

in $XX of XX% $X.XX million per of shareholders. We that program, flow dividend of capital repurchases with during base a given this capital free quarter return and of and as generated end, our our $XXX flow declared $X.XX we framework, cash of part of recurring To share. share million free of accordance the we cash per adjusted our our dividend to share returned of return variable

free targeted to variable is and amount difference dividends through our distributed and up base the reminder, repurchases. a designed flow cash any As between dividend payout make the share

nearly with with the Finally, associated capital our repurchases return may repurchases, of value to note is share program quarter. to that second the respect aggregate share up of as you XX% compared

received moments. proceeds discuss few a occurring topic more Michael I've incremental saw repurchases that In in are asked through and warrant we to exercises, Chord addition, sourced from in

to authorization, million the capital commitment a believe new to shareholder capital to which previously both As additional we performance program and discipline and to Chord old I've opportunity replaces investment intrinsic acceleration return announced Chord peer-leading quarter full the said to I we've repurchase demonstrates share and modest before, represents. Accordingly, our year, third of we and the the guidance, returns strong the peers volume take quarter reflecting advantage program our and discount discussed. production schedule $XXX increased from our and that to is $XXX flexibility gives have value. million Rotating

be guidance is end the Operationally, higher million $XXX to working of year in the program. Full high some seeing also to of reflecting from $XXX range, at interest the and we're our of capital total, our encouraged expected activity online laterals. acceleration X-mile we making wells in wells our by were brought the meeting X-milers. continue on about to we're to third performance is XX date we expectations. half and the In be the we've Over executed million quarter the progress

an of furthest the clearly portions observing see time area. development from can versus wells in we're lateral, over each and contribution uplift You the analog X-mile

can additional presentation, where details You on we and wells updated of affected Slide on Foreman the X In investor by these we and both see in data XX versus study performance X-mile of areas, Fort the our production find Tracer time uplift Butte. provided Berthold you on Butte Chord can a early discussed meaningful analogs. XX. X-mile X-mile production from cumulative Slides in And was specifically, wells Foreman

and the Once to wells. degree began out operational good was expect performance, these lateral X-mile to continues progress outperformance to wells of the increase continue our in out portion to and of outperform that with they top cleaning drilling, we the to also make wells, cleaned Chord as completing the produce. respect the X-mile wells,

of year we an in representing XX% X-mile our as quarter for reduced of improvement of materially XX third the XXXX. presentation compared per have approximately times X to As well, drilling times drilling the over Slide over days to wells shows past

wells. the stimulate generally been in On the to and our and most also side, we've third cleanout improvement of made recent mile steady access the vast majority have able

third the TD of X-mile we quarter, online. we substantially full brought all wells achieved During on the

wells, way, and XX% completion mile are X-mile only as and we is a first X productive XX% XX% for drilling reminder, a third about for Said uplift assuming As lateral EUR XX% the another we're the cost. miles. as more assuming longer

third we out. cleaned practices, volume and percentage to the response believe mile could of that's proportional completion nearly effective cleanup with be However, the the

for Chord reliable sustainable a sustainability full published as finally, and our Thank delivering in responsible company report manner. the together September, great in its efforts reflects governance combined which and our transparency energy this emissions a first you corporate other highlighting affordable job our to workforce providing safety a on and commitment and to things. business putting among health as does reductions, And and it team onto

free We welcome sets quarter, and us serve. remainder communities for and stakeholders executed progress our look we returns Chord To to up and shareholder shape efforts we feedback strong sum flow for and high to nicely to upon things our year. the from the the which stronger our ESG future the on third building even up, in well cash of forward deliver

exceeding asset and work Our base further forward. to will is expectations meeting going improvements we or drive

to over I'll Michael. now turn the call

Michael Lou

I'll a key highlight Thanks, third operating handful financial our for and the items quarter and Danny. of XXXX guidance. updated discuss

strong about Total oil X.X% guidance. over in X.X% mentioned, were were the midpoint Danny volumes third above about volumes guidance. midpoint quarter, As

Our August midpoint quarter fourth day ] expectations. oil per in guidance with XXX,XXX [ our barrels is line of

everyone exceptional a the full involved. the of premium were proud better and barrels our amount effort, guidance really in third than slightly per quarter. by and over production year an to on modest This of on a strong echo Oil oil achievement WTI at midpoint was realizations remained I'm want guidance. extraordinary we increased basis, day. core to team And comments the by I Danny's a X,XXX

midpoint. the fourth to to an slightly to quarter, refinery oil expected residue in slight while with a gas basin is pricing premium WTI percent production of to our due weaken higher midpoint a NGL realizations pricing guidance touch pricing Hub were Bakken WTI. below Looking expect to turnaround. unexpected line as But and of Henry a a we percent still remain as was

We both expect quarter. the NGLs residue modestly and in pricing to for fourth improve gas

focused per operating mostly of We seen Production was a improve a the we the lowering in that BOE. quarter, revenue over of $X.XX and but towards third high the within as quarter and the program. We've LOE $XX.XX was the due in to XXXX, fourth trend similar an cost enhance we rate downtime per tax our to course workover in downtime guidance view X.X% BOE expense the a and third higher of to in and improvement efficiency the investment the costs. reduce was end quarter. LOE revenue. meaningful Turning Both workover as side expectations, remain were expense. to percent on GPT expect

in XTO mostly substantially merger-related The costs quarter lower BOE per in reflects $X almost of quarter, $X.XX the to closing Xst well sequentially. we Chord as increase bolt-on third guidance to was averaged and latest midyear million the of $XX.X our we the SEC expect pricing. acquisition as merger due At an our changes, increase full integration don't July DD&A DD&A the reserve year cash slightly this point, third forward. forecast. G&A significant complete, and going expense lowered to reflect the is

per cash Danny given taxes to of taxes the million during at full cash no high items. in the the be to the X% third And to a year XX% of and between expects oil guidance million approximately fourth capital of $XX paid of end EBITDA fourth Chord barrel. quarter prices be quarter. towards that we mentioned $XX expect to $XXX the $XXX couple Chord quarter,

to led original expectations. incremental have versus drilled times cycle improved the feet year First, lateral during

more wanted on details $XX these quarter our accounts is capital to and Danny Second, return incremental approximately of working increases interest slightly our on you the capital. share million a interest give for expectations, and few above working discussed repurchases. for

$XXX of During third the million from repurchased the return Chord quarter, cash million warrant funded related of proceeds exercises. capital, third including with quarter to by $XX stock remainder

and and to remaining in quarter. third of repurchases fourth not of use the And cash calculations of quarters, were with This at in capital. quarter million $XX repurchases. received $XX the the million $XX the We for approximately respectively, $XX warrant million million are of this included that able million the and the roughly third we're quarter for beginning return fourth exercises in third $XX from incremental of

from similar forward, generally expect received a Going to fashion, we use warrants cash offset to dilution. in

Turning completed $X and The to fall recently $X.X liquidity. base commitment respectively. and unchanged redetermination. at billion base borrowing remains its elected borrowing Chord billion,

million. there and XXth, approximately was September drawn was $XXX of As nothing cash

Finally, turning XXXX. to our briefly attention

oil the into we of rate our growth XXXX, second decline Given as the production slightly. in corporate increases look in strong half XXXX, annual

for end of XXXX, of the our with is proportion growing reverse day volumes we towards around of maintenance barrels As forma XXXX. the associated with XXXX XXXX. and a oil capital expecting of this full little we're to $XXX see flat with Overall, On decline the capital declines million. in a X-mile producing benefits increase expect to expected into this basis, we shallower pro XX,XXX start wells, a year to per program over

half a follow the to the be year flow will pattern leads returns. team strong sustainable the of Additionally, XXXX TILs of higher first of remain focus is that that In means XXXX This volume the summer spring expected year should the the This focused closing, half. performance year. to concentrated profile in drive half next similar and program. free with directly activity cash than towards months second to to second to on the Chord our capital with and peer-leading return continues and a

call that, Laura questions. With over for to the I'll hand back

Operator

Instructions] RBC first Hanold Capital come Markets. our of Scott [Operator And question will from

Scott Hanold

parts EUR you're going And you Danny, where different talking to level much that and seeing a of kind on of the more of is can of do on us your out your about sense that an were basis? contribution last coming that -- -- need? applicable seeing the X-mile how wells, things performance information you acreage? you see across give full to some Like mile confidence is get good

Daniel Brown

in start may with of over and Scott, the how area ], first, then respect we're to expecting field one have another -- it flip that Chip I'll who part maybe third with any the to see [ in differences real second mile. to much So versus I'll

From I think over require a growing that's the standpoint, we're we've production got think obviously So applicable across we -- do position. to time. going whole confidence, but level it's confidence

go through level at facility of as decline like go we that so out any produce and then constrained, time we rate. on a were terminal flat for decline sort our period making and turn decline B some a unconventional we factor of And and we these wells, of we we

decline to is get recovery And it's going be. factor through and that that go ultimate terminal just your that rate know process so hit to you know you're to it's hard what -- to B and going until through what exactly get

having now growing confident right is over good. of to very just but strong will we very contribution very I that the we're time. we're The at we data seeing but say with -- with production at we're and looks What see we've that XX% The are we we that feel the that Tracer we've to encouraged that, with is good. from -- look done we wells data is need have we're the a seen have more wells the production across we're our because we part us where see both all a seeing that This underwriting basin pressures we know of giving that the lateral to the furthest shows that. need going

last think all XX% a growing I this sort confidence these -- to that efficiency of so are mile. we're be it's all in above level going And the of of something

think we're have. soon with seeing. know comments I to Chip, but know going we're you what exactly pleased what be, that's incremental I to too don't what really

Charles Rimer

thanks question. Yes, for the Scott,

half, of job in clean out, to first Just cleaning these a has now doing of we're the XX% milers. a team out probably XX% and they're were the X job fabulous a fabulous other cleaning the things. wellbores. up couple and so close in XX%, We The done

the As expect we're contribution going areas X X we're Danny to about see said, throughout different basin. or that the completes Also, back or the mile I last so. half, the

now. that testing right we're So

feeling I we'll is are. to data first out. I'm operations the the more would have lot team really the cleaning So be tell and you. able we a sometime way where in to The strong quarter, about assume But

they've So really what proud of done.

Scott Hanold

bit Great. down a Danny, maybe And to pin you just little here.

of that? kind about of You factor, time get that how more the X- into terminal define that, you see past generally, waiting decline the type to a Is post X-year B talked would to frame? like more

Daniel Brown

get years year get it factor plus don't think but call you really is long, think a that data X need to start we maybe past idea. better we're of where probably we long. much I right X little I to that and and with now, a a at

Scott Hanold

look, thoughts give obviously, I obviously it. basin your lot have that side. a My over Auto if Got around the in Chord participated number mean, being as here on on and you forward, over us on fit on M&A. of you M&A you a Can last And months follow-up the is look going how give strategy? several last the guys some -- the and a M&A consolidatee. you context And you what in-base does into do can years. consolidator

Daniel Brown

Yes.

equity And believe look as in of broadly, We either up that the it to by how are Scott, the we're means whether that. participate consolidation. product part we consolidation or opportunities Chord We're That's consolidator to a for being in we consolidatee sum I'd way and a maybe we'll saying, formed. is believers plan larger move We think I sensible consolidation. of story, forward. was do okay. in

in I participating veins, think think those consolidating. consolidation along where about as we're we

look natural consolidation I very thing think at. in-basin obviously for to us is a

have that position We touch acreage with Bakken. million-acre the really position a significant we've basin very the We aspects sort in slightly over X of of got. all

and run, standpoint sort converting our of a our operational of in-basin just -- capability, we subsurface to knowledge, from an the synergies whether from X-mile of makes X-mile lot consolidation operational sense. routes lots from be DSUs So it

I at talked open to We ago. risk and very we're are about basin clear have risk higher also moment basin is and all factors associated and are also recognize with out-of-basin that within the out due the opportunities, than consolidation -- consolidation of consolidation the associated we a look but

add basin so And just a to in-basin. higher a it's bar versus consolidation

to thing you're business, on. big a important And think to -- just I focused thematically, in commodity so And consolidation. but believers that's when be recognize an in

Scott Hanold

if interest opportunities, players impacted -- rates look ask like when in-basin at like of the to willing the I the rates? any any how that Like question, PE higher just from or players kind to could tweak seeing little price to the you that these some Are And pay. you be Does have Yes. and a sellers smaller too. higher have influence? interest impact of

Daniel Brown

Yes.

backside, is speaking, a kind you specifically have say Generally debts helpful say prices M&A interest seeing, to in also rates that what thinking you're in the early if number ] to to And general. on I'd you're swings to deals aren't see say et probably of of very are effect I too higher think to commodity topic transactions on helpful maybe very got I'd cash-based [ cetera. big that. about where aren't

where see I'll goes. we'll to invite Michael, so that any you And comments. further make

Michael Lou

think I history. have been the No, that's of lending capital much than tighter them markets, exactly I obviously, mean, are they markets, right. the across all

for exiting increasing obviously because the that financing higher. that cost as about financing forcing buyers think so and And just to maybe cost as sellers earlier is both is well

makes pressure puts with valuations. more It bit say, higher how both and on would also it about that buyers I interest they little sides. cost obviously, disciplined, So a think

Scott Hanold

Yes. latter that. seller yes, have motivated No, as And exactly more answer a I to -- where a of appreciate the you was in more pointing of is that potential a buyer. position part I better that's what if is you're and

Michael Lou

agree with totally that. I

Operator

question of the America. from comes of next Abbott John Bank And

John Abbott

Yes.

it's at recognize implications Tracer X thinking early are with ever -- what still looking be you for I But a the and are considering do test? the with testing potentially similar think X-mile could you lateral laterals. I actually you're sort of the miles? So you tests X-mile mean,

Daniel Brown

seen that, the is to We've yes. short basins. in think John, other X answer I miles

geometries laterals. we've would doing We got lend themselves to have -- least there's certain that really X-mile

some and and is if big I'll of the had unknown, about have moving have it at concerns lots clock point a laterals rewind we from would X-mile into step of early you you would right, into standpoint. a it. we sort X-mile tell You're thought the was

it and has is we're think been X-mile think the very laterals investigating. for out forward. program certainly, there something But X-mile excited we successful. about I opportunity absolutely the And date moving to We're

John Abbott

gave And follow-up you on then for color some Danny. question, our good XXXX. Very

You time. underlying is your talked rate about a in elevated little this point -- decline bit current at

next You could reverse end year. of suggested that by the

that roughly could low around in be the for You CapEx indicated that million range. XXXX, $XXX

you that in the given When potential rate versus for when XXXX. you in XXXX. -- think do about the CapEx million of your think you think spent underlying implications change at in the the XXXX decline the $XXX XXXX, end rate So reversal potential to you about the underlying about what decline

Daniel Brown

rate, perspective. I with the lower a decline reinvestment think with -- you'd be helpful should as from expect, it rate

a running you're equal, maintain we're And needed so to hold. trying whatever else CapEx being program, all expect to if maintenance lower production you'd

think beneficial grow as in be production or not see base decline. efficiency, base X-mile existing you a as laterals see us so the march to but a lower to any achieve it's It's at we to helpful and of it going I way, maintaining we as And we proportion better certainly forward contribution sort -- the these our level. shallower these of contribution want to in production to look capital for CapEx of maintain if that that

John Abbott

quick squeeze in I if So can one there. a

So for think you your -- what think underlying you take changing moment, gives do rate? you you sort long-term if about decline if at that's deduction, of you CapEx that maintenance this

Daniel Brown

Yes.

you think that something should thinking year. of we're reverse the bit. We if it's next XXXs think I low a going little ] [ to be in off

costs, lots with et here things Of and can between course, cetera. service of change there

something we seen where XXXX, you efficient more to in And we've at frame. going what to anticipated capitally get 'XX would to time that now, we're But I the XXXX think and than see expect right be with when it in where program. we'll so we're have

saw probably trending what so year. towards we And back this

Operator

the any over remarks. That session. Executive like Officer, I Instructions] question-and-answer would for Chief back to will Brown, conclude to Danny our closing turn conference [Operator

Daniel Brown

for for just know standpoint, It a out, stronger company. quarter, excited make also and so a stakeholders. Thanks, execution from XXXX for for work thank was dedication We're Chord commitment an as Laura. the beyond. to to third plans all and our know, fantastic strong to we'll -- close remainder I employees I a Well, their and of team of the have improve, we to a job. company did setup even the want relentless and our really a team quarter to drive continue XXXX about of Chord proud great of an the And all to

thanks to that, joining with And call. everyone for our

Operator

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

disconnect. You may now

Chord Energy (CHRD) 2 Nov 232023 Q3 Earnings call transcript