BCEI - Earnings call transcript Q4 2018

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Operator

Good day, ladies and gentlemen, and welcome to the Fourth Quarter 2018 Bonanza Creek Energy Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce Senior Manager of IR. Atkinson. Doug Mr sir. ahead, Please go

Doug Atkinson

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

with call filed Financial our release, investor Operations Officer; and joined earnings I'm Dean Tinsley, Chief press DeMuth, this Yesterday our President Greager, and the and Vice presentation the of Vice Executive Chief and SEC. Brant Executive new evening, by and posted President Engineering. XX-K a Senior President have Officer; On Eric morning, we issued

All of accessed be on the our website. Investor of which can Relations section

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

believe read certain directly should SEC other will Also investor You in described comparable full financial earnings performance. the to as are in release Reconciliations non-GAAP GAAP XX-K these measures our are refer our presentation. our measures call, and most contained of and XX-Q, we to use in during they we to good evaluating this measures metrics filings. disclosures because

the the call remarks We will Q&A. time at prepared start provide end and with for

pleasure Now and CEO. introduce it Eric? is this Eric my to morning Greager, President

Eric Greager

number Thanks, key wins was everyone. Bonanza business. a a XXXX we Doug. realized of morning, Creek, for Good good year as for our

curves. more and in our assets liquidity XXXX reinforced and $X BOE at of XXXX. our in sheet type completions, per our the value year-end Mid-Con expanded better performance in carried very of with than balance sale Let helped updated into debt. execution, creation quarter. maintaining in The from $XXX while Improvements per first well allowed to $X.XX facility in fourth has structure and credit me to Wattenberg low focus cost LOE in run the through and We resulted half reduce in our us our significantly the BOE on design accelerate million highlights. unit Improvements

exiting leverage. approximately has plan development of XXXX, current a turn half with Our

Our SEC mid-February XX% gas million. million. PV-XX experienced by or increased Infrastructure, is Wattenberg our a our We further optionality. at approximately a our Mountain downstream with $XXX an BOE, connected we The $XXX processors at constraints year-end XXXX XXX.X PV-XX PDP proved strip million delays. Throughout XXXX, of reserves, of no to Rocky enhancing fourth

We to by French are We XXXX. building successfully will barrel oil QX partner differentials necessary moving and out we and to are late XXXX. with currently oil in pipeline in which Lake infrastructure anticipate delineated an $X.XX gathering to early forward up out terminal, gathering our Riverside drilling per lower starting the build our

encouraged This potential the pilots meaningfully while continue our results resource We learnings applying in the continue well recovery, maintaining with to improve of has legacy higher well density be in We west. spacing our performance. to to XXXX. plan

addition of XX% we've operational Our as technical with to the the pleased rounded Brant the increased translated CFO. XXXX. DeMuth, QX out management and recent also I'm line adjusted QX from EBITDAX XXXX as that bottom to team the momentum

prudently have continued for adding on in are will flexibility, remain success. pieces and In our technical we capabilities. a to focused continue believe respond we Geologist market that operational well so as As and Chief place swiftly can to XXXX, We reinforce operational conditions.

XXXX. turned $XXX sales. gross million for of wells XX wells completions $XXX is to Drilling compared CapEx million roughly will million XX $XXX of budget to gross and to to provide $XXX million, and down drilled XX% CapEx Our

intensity Our XXXX. will to focus our west plan legacy in where higher to designs in and be XXXX areas, we central compared apply

in wells exit also approximately as XXXX. contemplates we XX plan Our progress

of approximately excess exiting the guiding year in XXXX, in a XX% growth are leverage of We for with while turn. production half

continued presentation for less growth more our groundwork a investor plans roughly production one see details. leverage strong than with XXXX XXXX of Please while lay of for balance turn. in the maintaining sheet XX%, Our

Before Brant? we Q&A, go the call for updates. to quick I hand to two Brant want to

Brant DeMuth

morning, quick do financial two notes want Good relates highlight to our I it everyone. Eric. as to statements. Thanks,

by First, post-closing our fourth adjustments quarter divestiture. our numbers Mid-Continent were with very impacted minor associated

day For example, roughly XX barrels included production fourth quarter that per asset. from

into various XXXX's a is Second, wanted as to includes the information The additional impact ad our production account during our $X.X I valorem can up prior Q&A. an benefit to this period tax of but rate. million interest after tax with There fourth credits that a estimated in Company to tax owners. settlement it tax received we net quarter. owed shown XX-K, the Andrew, to valorem overall and ad expense amount, non-recurring settlement, it gross severance please taking highlight in XX-K And concerning open the

Operator

[Operator And of the Capital. Imperial question Instructions] Haas with our comes from first line Irene

is line open. now Your

Irene Haas

everybody. morning, Good Yes, hi.

is with So Mountain you and pipe, the this Rocky speed really just know now it and just color an sort adding like nice as looks you plan do little a you're for permitting outlook operating a on new infrastructure and operating, operating how to of out ground, producer. a laid XXXX feel where oil in the with you have difference feels as be or regime any the of ground it that place, on it permitting,

Eric Greager

It better result events the up of in The in uncertainty Proposition XXXX were of Yes. of lot failure as certainly Things XXX terms a to on tough. in mechanics of industry. the November. a of have the Thank generated ground the you, leading November Irene. gotten

However, permits and planning COGCC, still just just of on pretty this decent a there plenty requires diligence the decent of ground. the good backlog it and and is requires a at backlog

feel the in and all vote. in that The will X-rig clearance. efficiency the particularly hard, XXXX, have But moving continue on a level-loaded a have those operators operate very lot Rocky good are in is working as see contingencies, I little ground, things plans well real quite and operation if for turn. can we effectively operations a place Bonanza solid. environment. pretty it's Mountain to has constraints. we But as then just to work backlog think The terms we turn permitting continue remained COGCC it gain to good of continue as far in I by without Creek, guys just program know Things infrastructure into the the of challenged

So very we feel good about that.

Irene Haas

How have hand? many permits you now right in secured

Eric Greager

gained little far way well of through We Proposition area, there are the can start right count XXX when in include to gray that out got It now would leading then permits process that permits a schedule have in XXX are we maybe be includes to work that always that we bit it's up tend hand process, you is as about a some the we've effectively complete. enough and are that permits because work There our we've their in far pretty enough to that gates also with feel to because we permits of counting since. number and them something they process, through but on. through they COGCC, stage a have complete but

Irene Haas

Great. you. Thank

Eric Greager

Appreciate you. Thank Irene. that

Operator

line our SunTrust. the And Welles next question comes from with Patrick of

Your line open. is now

Welles Fitzpatrick

Hey, good morning.

Eric Greager

Good morning, Welles.

Brant DeMuth

Welles. morning, Good

Welles Fitzpatrick

could chance you'd additive offset it so, outperform be it seems partner French expectations. you decide that CapEx the else? be if all with you or to there would something and continuing really to just XXXX, that quarter. accelerate in on you that Lake, think to Is and any to Congrats do

Eric Greager

two It you. I'm like question. two-part Thank Welles. going parts. to question that good answer a sounded it's a Yes, in

you The the price year, don't on the once construction is in a accelerate a gathering parts relatively able And that it's it kind difficulties first the a get, companies system. the move budget that expect in we'll there around particularly partnership moving QX very and having part There commodity number is of short bit in get two on I terms of be difficult, fee. a much. of to a design in to we little plan agreed had of you with

plan build system we'll gathering XXXX it's accelerate anticipate to starting will and the a out But up much. through XXXX. to anticipate that early do going don't I drilling and move picking rig in be I according So

Welles Fitzpatrick

maybe of that sense. the through year? a out. the makes or us Okay. kind XQ talk how guys And kind help to exit exit bit, flows you little of That just the sort XXXX guide Can to obviously have modeling XQ, you of

Eric Greager

is I in you're Yes, production profile, of speaking what to? presume terms the

Welles Fitzpatrick

That's yes. right,

Eric Greager

look XXXX, expecting. of question? XQ as continuing XQ – but XXXX sequential in Is of up course digits, XXXX And in French so the about of that looking most down results and decelerate thinking you in sequentially, as is, fact drilling we're XQ QX Yes. you of the of kind XXXX half that way in can we CapEx on QX. XXXX, begin to this anticipate in you to Lake mid-teens beginning most QX, more XQ begin and quarter of XXXX about into you and rig XXXX, into at over flow to we of in would would of mid-single again, build the and at in. then back if and at growth see basically then into early expect production rolling anticipate what that's XXXX that and that the maybe completions kind kind of you Yes, that uplift the get net investment it $XXX decelerate up in million we're QX the about pick in show invested to We're

Welles Fitzpatrick

I might we I know one to media on last guys That's but from are reports in detail. up thoughts more any in great obviously that's mean I some just Irene, most you a omnibus might there's Yes, expect there, [indiscernible] out the one there? here. bill? been And plugged sneak follow on almost perfect. what

Eric Greager

It's with conversations, seems that indicate expect it's always to bill. the me legislation, maybe seems others. omnibus of maybe to the one can still trade an in with a speculate the common dimensions two conversations two around having pending. on Yes, while COGCC and little and peers I'm posture in I changes groups peers the to we to the and to language have risky is there Act. the to element that nuance But all themes be The others

gas there's little the mission a and XXX. COGCC vis-à-vis pillar gas with oil and resources of to Rising's impacts emphasis recall, leading as was to up oil health. the perhaps key perhaps to you of Proposition be going That the a in the community balancing safety I the environmental on more arguments Colorado and fostering development less little emphasis of think on and on development

so element, element is also And undergoing that for very think of of that a lot of of they these agency And a probably and/or see expertise part small and and kind is small citing control. control allows we the it's technical we flows have that local local to don't for second out to and it, X,XXX, would to have the and to the just to expect municipalities on that resources going an sub X,XXX with lots sophisticated because COGCC communities, defer significant people, opt a the ground X,XXX, sophisticated evaluations. into back

parts two hearing now. So I of it but But major a those I'm is expect that's it's because undergoing it or would and not to be again out. what yet come little out kind still modification, risky may three

Welles Fitzpatrick

usual. That's wonderful, very helpful as Thanks again.

Eric Greager

Thank Welles. you,

Operator

question you. line Phillips with Thank from Johnston of the next And our One. comes Capital

line Your now is open.

Phillips Johnston

up thanks. you to the ask oil I about the which in to XX% quarter, guys, fourth wanted Hey since late crept think is highest spend XXXX. your mix. I It

year? might your some the that am the wondering you mix year mix, give oil trend expected as for XX% throughout I for for on guidance I this calls us could average but think as the year, on liquid well how color if

Eric Greager

Yes, essentially thanks refer day pressure system but a but reservoir ways, that dashboard we're a moment have dashboard, Phillips. number benefited pressure a you pressure. essentially that put moment that to into manage we've every throughout essentially and reservoir management composition this together, we and QX, we particularly different good is, from used of what flow us tune It's XXXX to we to in the question doing we hear in and

reservoir environment out that much So gas you delivered back is the can and gas, the from as much is sweep hold the environments, ensure you energy. benefit within you solution before very solution to you as we to deep ensure, drive oil as in a to this get the reservoir want drive that gas have

And So those we every dashboard sure, back you to unit possible. evolve see that drive implement we business. control delivers better as as want continue continue to to solution of and gas practices into as make performance, the oil much

yield. performance enhanced recovery well in is pressure in managed or higher that across practices curve. really oil is the that's also reservoir the flow results resulting So it back that And better

and stimulated So that's in reservoir conjunction oil volumes better early the one all so SRV, that but These benefits complexity of hand yield, time fracture and things on. also both performance greater oil work with in hand. things long-running

expect improvements. other forward continue but two, to of a carry would pretty differential these the it's between point In with is or commodities. value It's meaningful percentage oil the I terms XXXX, and what

say the upward yields. So beyond, XXXX but XX%, would to in we're what everything we and to I do and to continue to is going between continue pressure XX% on those can carryforward

Phillips Johnston

really good completed. Thank XX that's And drilled, Okay, last then when you think you more wells color. year you. I

this X-rig think running to drill XX that be fairly plan a given about inventory and more just you're then I to only exiting turn of high, a wells, year, you're XX the year seems with the sales, is to wells about DUC I you to XX program. think that

growth. to production inventory XXXX be I of down my that a at assume you normal drawn there? all? but consider assumes does as amount around X.X-rig out we of know expect And the So it question is you XX% that DUC look where program, what inventory is to do

Eric Greager

make really efficient then maintain a that drawing your operations assumption book have and got side say we pair highly that not you want doing that's building efficient you drilling a the best And think as loaded well practices, to hedge way performance. pretty on the an the DUC What DUCs. when through, build operational level to up and I capital doesn't we're pair to down efficiency against you've It think hedge those into is maintaining deliberately you that, because can operation deliberately We on flexibility. then would results best as solid we the solid you on carry inventory. a much side. got corollary And in commodity as the you a book, we're

it's one hand; that efficiency. So continuous think X-rig on loaded program. yields the a We level

time of is any to maximum what in efficiency. we're sales given the particular at doing turning In in for wells and – stimulations, looking terms point

frac throughout deployments maintaining as in points in a and system because ready have again other crew So really there at is at some crew. overs points it's up and well frac stars our will line managing be one that can. will maintaining the have possible we interventions of time. around DUC pad efficiency deliberate about all, program, CapEx. that won't efficient as just efficiency gaps where or pushed And At all one out terms through. around we're accelerate as pads upgrades we more and talking may work two possibly we're all frac theme talking so our the about and in may we and other about two can managing two with stimulate whether as we'll high capital It's And crews and our the the is and a allocations entire cases flexibility plan simultaneously pad In bring facilities we be capacity crews. that rest we with about CPF and organization, over have two and stimulation and may capital a that we less we

Phillips Johnston

Thanks. Okay, makes sense.

Eric Greager

Thank you.

Operator

comes you. Palmer. question Beard David with the & of Coker line Thank [Operator next Instructions] from Our

now is line open. Your

David Beard

morning, Thank Good gentlemen. you.

Eric Greager

David. Hi

Brant DeMuth

Good Morning, David.

David Beard

a little bit regulatory impact. on Just bigger question, the a picture

difference some First, the companies your the between do regulatory you in noticed test the big activity of and any with smaller company with regards actions neighbors overlay?

Eric Greager

great their or aligned. people. of resources. They great a Directors at see of much at the exposure has with size Where on question. example We difference for lots surface, smart. in COGA exposure That's the way of of bring perfectly in They're and urban terms environment big do lot more a looking in we interests in municipal They're with municipalities they're of their – sit correlation a cultural terms overlapping company. at our and they're the and terms don't less, difference versus for is, Bonanza – no the of Board example, to interests Creek lot the the very between COGA, political our operators from We sit see acreage.

their conversations, today. the companies possibly and of way we much ensure alignment solidarity alignment of as solidarity really between going a good to that have a see the at as we to the that allow really so, is industry arrive was really can, difference pleased these through and posture. because interests companies there vote, up where the the of November right we was is to the to not really and one up strong seems right in bifurcation the and solidarity When It's job interest that's leading do But things view carried the And within we to that's think has I companies. to be outcome. the

David Beard

follow or would some more helpful. on shake into loose relative That's parcels, some small of then, the overhang, Okay. discussions least environment be this M&A big relative create M&A, to to a And at parcels? property

Eric Greager

both. People today is, it's great increases are a and depressed the political their It to pressure, – difficult much bid-ask the a that or to function is higher and public's pressure right more The under an because have because DJ. cultural that's of spread a like more when the value and the are talking assets, question. Yes, right. encourages problem NAV. the in mark-to-market when the to activity more more And perhaps do, there are are largely It about overhang. you're of privates public's on that's the they feels way does more privates tend act, multiples

the my willing And so be there's how between, to the might value a his pay. spread big seller and asset buyer who

scale and we a of universe. right. What and scale the we the no about believe cash maximize. And is really flow look It and you attention care There's energy deal question operation we we so the think do efficiency. on spend we that really it. that so deal When efficiency something benefits that at provides great an that we and about a constraint scale, environment great on means is way and know informs think working time scaled a of the to

David Beard

the All color. right. Good. appreciate That's helpful. I Thanks.

Eric Greager

David. you, Thank

Brant DeMuth

David. Thanks,

Operator

I'm Thank showing at no this questions further time. you. And

I CEO, with So closing that, Mr. remarks. will call over turn to back Eric Greager, the for

Eric Greager

Andrew. everyone. for nice Have you, you us joining And a Thank day. thank

Operator

for today's Ladies conference. wonderful program Everyone, in conclude participating disconnect. all and thank day. have a may gentlemen, you This does you the and

Civitas Resources (CIVI) 28 Feb 192018 Q4 Earnings call transcript