BCEI - Earnings call transcript Q1 2018

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Operator

Good day, ladies and gentlemen, and welcome to the Q1 2018 Bonanza Creek Energy Earnings Call. At this time, all participants are in listen-only mode. Later, we will conduct a question-and-session and instructions will follow at that time. And as a reminder, this conference may be recorded. I would now like to introduce your host for today's conference, Mr. Investor of Director Edwards, Relations. James Mr. begin. Edwards, you may

James R. Edwards

to Thanks, quarter first welcome and Sherrie. morning, everyone Good Bonanza XXXX Creek's webcast. and earnings call conference

President be earnings Finance Operations our and this by and Scott Dean On I'm Vice Financial Officer. of Engineering; and accessed have Senior and President Principal Senior new filed Greager, of Tinsley, XX-Q of call investor Officer; Planning Chief sections website. President the a the our Vice Fenoglio, Executive and of morning, Eric which Yesterday evening, on can release, we Relations Investor presentation posted issued all with our SEC, our and joined

will Some forward-looking results many to investor that projections our include presentation that actual of are morning risks May in the could these be during cause the prepared this slides the will remarks. and be remarks aware uncertainties forward-looking differ subject in statements to from referenced Please statements. materially our that

and our our You to full read to XX-Q, we will financial we this certain should filings. believe described non-GAAP refer good measures, disclosures in Also, are metrics call, because during XX-K, other they as SEC We'll are use the most measures Q&A. for measures in these our prepared contained and call the to in at performance. earnings GAAP comparable evaluating the end with directly Reconciliations release. remarks start time of provide

and Now, morning introduce Eric? CEO. Prescient it's this Greager, pleasure my Eric to

Eric Greager

first quarter and Good James. and call for joining everyone, earnings morning, Thanks, our inaugural for thank CEO. call us my as you

efficiently to drilling which completion and focused a excitement high program base and restarted the to create stimulations improving the performance at company Creek. asset arrival, Bonanza increasing my express opportunity improving intensity in through performance. First, cost here in that I provides The on efficiencies. resulted Wattenberg want well to has Prior well a join value my team the to Greater concentrated tremendous

will utilizing to well by organization data these high-intensity forward, maximize Going performance. continue technology and our pushing completions designs

completion better of the the on where corporate value. operations to to wells we'll of remarks, covering answer maximize With to program. and to shareholder efficient update provide your will be performance remainder call, that, for morning, the returns we and see We Dean? details financial After focused for call enhanced our the and our go encouraging be will continue I'll This will his from to questions. execution Scott Dean a continue the quarter, operational update. Dean's hand Dean quick

Dean Tinsley

production a XXXX Thanks, had and successful completion Eric a quarterly numbers that guidance. morning, and of our with and good everyone. program drilling We quarter exceeded remained on-track first that

F-XX days. we the brought western the over During the performance which online exhibited first X-SRL quarter, acreage, XX pad has in our strong

The system, Our to has keep turn resulted robust new wells. combined with both combined outperformance with RMI new in for better-than-expected flexibility and in pressures in old assurance performance, and low, production flow quarter. well servicing well resulted pressures activity continues gathering for system the off-take which low and

the as brought are is and second that in XXXX. late in As which growth new we we quarter cumulative to take online, of driving accelerate wells growth and second are expected hold, XXXX Growth guidance. these the the on the year effect of based the expected drive from second X% is quarter, midpoint halfway high-intensity this rig seeing later are rig to significant are through completions sequential added second through

within per-unit and down earlier, will generate scale drive costs mentioned operations production increased our going forward. Eric As these volumes

have On system for like Next, of part gathering to both shown on XX, prevailing based RMI RMI pressures of I a our we impact our slide the would system discuss pressures. further system. and

for have significantly over year, XXX Meanwhile, yearend XX RMI XXX remained have pressures PSI increased months. outside slide, RMI peaking at PSI the system pressures our around the from see last can you last the XXXX. consistently approximately the under As of

We have increasing to adding number party of as take points compression processors. and earlier, third by this mentioned accomplished the off strategically I

year, low During off-take new another has pressures allowed will adding RMI which yet we our of system flow our on ensure to new wells that helped (XX:XX:XX) the Sterling overall maintain November our our Later Energy, processor of for differentiating factor processor The wedge the production an anticipate on ability production, have offtake system the base has RMI the system (XX:XX:XX) added critical Again, to constitute pressure through point, low going adding favorable gas move in for pressures further assurance full additional pressures last despite our well the system we'll our which and a midstream, new in forward. gas these load. to been us production in through year, performance. older we are low point as control as volumes. to which – provide operational RMI significant a

Moving well on to of some our results. recent

providing our are have we production for May central Investor Presentation. recent slide We production XX, in provided in On our slick-water XX test XX slides on data updated plots our through acreage.

are you curve legacy which see As on XXX both after the slide, approximately the days, outperforming can wells central encouraging. is

to with of to we will recoveries. and pleased wells results learn the from flow-back completion on and wells going our continue all are both methodologies maximize and forward modify We

slick-water plan Lake including and across the tests to entire For we acreage. position, French designs our remainder North in XXXX, the of acreage test

our slick-water third test next acreage in XXXX. on in of a quarter result pad expected western is the Our

with that the enhanced of procedures. flow-back first Moving utilize XRL are showing results onto XX, completions our slide along high-intensity we enhanced recovery wells

quarter on and During first results pads. we March, our XRL wells JXX showed the two TXX in call of the the

SRLs, are these two referenced wells. quarter for we previously are assess and that are XX. the of total clarification, call time are Two shown five on which needed of wells additional two the in wells five results which for longer to we performance. the because five slide For Three didn't show simply, the XRL laterals same fourth of the have a pads wells,

have to-date. XXX encouraging are wells, production, are from we – of we these days the XXX which that results over Now providing

see of oil an of can basis. the XX, average cut per on after has of XRLs on XX% reached with stream you Boe slide X,XXX production these three a XXX three X,XXX feet As days

online pad, Additionally, On design. slope outperformance intensity This of these second represents acreage seen steepening approximately the was of which production, should graph, an data. our production slide increasing West and wells completed of days time. data which strong which pad F-XX on year and SRLs the over has of of daily the exhibiting completion our XX XX, at pad we in the high beginning eight a company's utilized that cumulative turned early can be wells provided from in are result production the have some

turned after on pad techniques modern restarting pad, first which drilling completed Western and first using in XXXX. the the online XX-XX North was program The Platte acreage pad the completion that was company completion its the was

We and have XX,XXX now the production average shown months an closely three with per pad, the F-XX production. results is still The pad. of Boe, nine of XX-XX continue quarters results early tracking while this eight-well of to three-stream for impress X,XXX from of wells results pad for the cumulative feet, the

results validate So, completion results performance they from further as enhanced we encouraged the program. are our by design the

until new to results In from short, now five efficiency. well see wells results, recovery over dataset is culture. all in proud that turn very and call to complete wells teams operating now field the continue drilling have impressive and deliver we wait his remarks. eight terms completion from French our producing; we of we to they have a we results. responsible program am will maintaining our a Regarding area such a operations both it financial before for and us, Lake, since I'll Scott safe I continue of superior while environmentally discussing for

Scott Fenoglio

and everyone. morning, Thank you, Dean, good

to and some will color. I additional First actual go our quickly through provide summary, guidance

earlier, have we that three the found while our than accelerated quarter which lower to out swaps rental off Rockies. week of XXXX attributed top-end but of was field rate. the were late oil it And pace the mentioned back Dean in We a production to the while out with on. compressors plan, upgrade for combination out to swap week. for higher last we of the been year teams This higher than quarter. swapping production an we per were of year, to recovery these activity would quarter volumes note the due expenditures began early first swap compressor to compressors had a of we is year-over-year. units able LOE wells new assumed production existing during have first the enhanced lower the fleet fleet, compressor forecast have oil due half new compressor be each guided a the of worthy to In two was for and can cuts I of employ, in flow that to As addition of lack line expectations, method our our think, last Capital upgrading at grew our that we one

While accelerated the this to LOE costs, lower in of forecast. guided sooner the than the has range. we in also our year annual timing costs still realize We be compression expect installation originally the

The financial guidance that include for statements. increased of in standpoint, G&A the first the the CEO excluded X%. guidance out midpoint from an revenue adding it effect point our to original our XXX updated We the for provided our the quarter. annual compensation for accounting have adoption ASC G&A year the by on Eric, compensation was like and approximately our to would which of had I G&A effect QX guidance From of recognition the

recorded processing of of ASC line net first basis, quarter no gathering, has we section transportation changed revenue longer of presentation the the are a net rather and Creek Previously, were some transportation as with our contracts expense processing corresponding in some revenues and Bonanza in reported XXX gross of adopted our our of the recording adoption, income statement. statement. income prescribed, such the gathering, a are Upon XXXX, As item but and charges. of certain on

is is to different, While effect of no net the these there presentation income. numbers

to We of the cash credit $XXX I We million and drawn status first quarter over with facility. on-hand Before million call $XXX turning the on credit our will million. of balance exited our million our sheet touch liquidity, $X approximately $XX and facility. the Q&A, of liquidity strength, had on

be regard Rockies, continue on XXXX the ratio the beginning our we XXXX become expect to are We one included cash of at program prices quarter the sheet at positive these Based appendix strip and going to current fourth lock of goals. take volumes With recent in approximately Presentation. facility and in of forecast the continuous leverage Q&A. behind our are a credit have XXXX. Investor assumptions discussion times our position debt-to-EBITDAX that balance advantage add to we update our completed. an we and positive May that quarter to pricing strong two-rig in to and expecting group and continued forward. We've is operator hedges call strength the in prices flow to of metrics in XXXX. our the redetermination, Further, low cash exceed capital both plan our May, are a gas announced in first the I to oil our hedge stay turn when With of Details flow will release that, earnings process turn under commodity natural and in X.X at year-end the and upcoming we'll throughout for to bank with

Operator

Haas Thank you. Thank with do Irene from have question Imperial we Capital. you, a

Irene Haas

job and head line considering been managing low you the Eric; for how you would you pressure take now of would a what's you This think My your do XX-XX, truly for job sort little and Hi, A this where in say, place The to has on that while, differently, of, that is What have you the in well. a Congratulations – impressive. know, team B good the now transactions? is while a little you do been kind remarkable envision count. done company, have question morning. kind on assessment? so

Eric Greager

there the you, attention to opportunity efficiencies focusing Thank in the focus our fracture pad what and Eric; our This , the processing scale technology team, of all going to of to development is stimulation would continue continues our operating in explore economies Irene. on of programs. current to to improve application be development and believe operations our ongoing terms say We – to and we're is, continue in completions gathering programs. of benefit facilities the efficient drilling high-intensity my I of attention and

about Thank the cash we course, evaluate flow. of pleased am with growth opportunities and find and continuously and ourselves balance for off Of and really in a I you. excited of growth today, strong position operating we assets do and assess throwing posture sheet (XX:XX:XX) the

Operator

Thank you.

Cowen. question Epstein David next comes from with Our

David Epstein

if IRRs, things? break-evens, kind know of periods, to wanted you guys payback all about folks; are Hi at talk prepared those to say

Eric Greager

Eric. David. This is you, Thank

on is company in my from remains make I wells I continuing the what think, certainly the value focused investments to would accretive perspective, themselves. say

capable that has on of gathering things on, the wells, system think stimulation reservoirs processing are opportunity various clearly specific the and interactions mature focused designs, One the fracture the artificial of company in systems and on in I've the and making systems, at focused improvements rock and I benefit value-accretive also new very the and of some we in high-quality had processing the me to in investments of to systems. gathering we understanding I would regards pretty value-accretive the is teams where the lift between wells place. I to do say that some are at we but comment continue for to it is, on the company. look pads IRRs, be What And is executing specific and With this today. continue opportunities stand we have and the investments technology good that with reservoir point to believe to

David Epstein

Okay, thank you.

Eric Greager

you. Thank

Operator

Thank turn today's for over call like and any I session to call. you now Greager, and the for to in President gentlemen, back Eric Ladies for CEO, you. remarks. today's closing question-and-answer participating thank would

Eric Greager

the I be what's we I conference helping Look, Creek. your call continued to luck. our been call. shareholders. thank will James on the to and of Edwards, months you thank has prospective say of to on and in want moving may to explore time for and now and James to road another the joining know current attention everybody Bonanza the and shareholders, James' coming minds this just Creek many He's the interesting him And to to for three in want Bonanza and that I interest opportunity, both forward and you wish on with final the of look meeting do getting morning, this best years, want

And you, are you James. thank So, those who all the on call. for thank participating

Operator

This program. thank Ladies you conference. today's does and gentlemen, conclude in for participating the

may You wonderful have all day. disconnect. And a

Civitas Resources (CIVI) 9 May 182018 Q1 Earnings call transcript