BCEI - Earnings call transcript Q3 2019

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Q3 2019 Bonanza Creek Energy Inc. Earnings Conference Call. At this time all participant lines are in a listen only mode. [Operator Instructions] Please be advised that today's conference is being recorded [Operator Instructions].

to conference like speaker to now Mr. today would hand over the your I Director and of Senior Landreth, Scott Finance Investor Relations. Thank you. sir. Please ahead, go

Scott Landreth

Thanks, call And quarter everyone. Jimmy. Bonanza Good third Creek welcome XXXX webcast. and to conference earnings morning,

Engineering. On Tinsley Eric President the of Senior DeMuth Vice Vice and by Financial Chief and Brant Greager, President Officer, President call and I Executive Officer joined morning Executive this am Chief and Operations Dean

our XX-Q Yesterday, the our filed investor press presentation which posted of release, Investor of our on new the we website. a with can issued earnings section accessed all SEC, and be Relations

Some that of cause other aware forward contain looking slides the subject are be include filings. that prepared our read to that risks materially, will November differ uncertainties investor will and should statements regarding the referenced to during be Please in this many XX-K, our our SEC statements morning. looking and remarks remarks disclosures presentation XX-Q, actual results full our could in forward you

during to earnings measures presentation. to we directly good to GAAP call, most are non-GAAP in performance. contained they believe financial investor measures metrics because the Also, will and of certain these we comparable Reconciliations release measures evaluating and are our use refer this

We move with will start prepared the then to Q&A. call remarks and

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

Eric Greager

for for our us call. thank third joining Thanks you Scott. And morning, Good earnings everyone. quarter

to in plenty Q&A. brief We time remarks order leave will our keep prepared of for

call Our with expectations last third the our communicated quarter. we results quarter on line were in

flat the production day our and sales timing second one-week third As quarter. of of quarter with due essentially was wells from the per to Mboe was XX.X to expected, program largely turned

XXXX. with release per is once annual months us performance once guidance compared again production earnings This raising in after XQ was yesterday. over of our year our Wattenberg production XX.X Our XX% nine through date through resulted to day, and QX which has Mboe to average production up average twice,

Our XX Mboe a up range of year. current to to is XX day annual per begin XX day, the per XX Mboe to production guidance from

Our in XX% was oil with mix for the our quarter expectations. of line

to correlated turned forward, high low highly and that expect in fluctuate have to be XX% oil associated Going sales to wells which higher range, quarterly in recent will with been we production. XX% cut to oil new quarters cuts the

CapEx for our XXXX months of range We're $XXX the million $XXX $XXX bringing nine on total activity to from to the the was are CapEx quarter we deliver $XX million, full to a previously. But $XXX to million. through contemplated pace $XXX lowering levels to guidance year the in budget. million

guidance also LOE We've year. G&A tightened and the cash throughout

nine costs the of for the fall guidance through within quarter our cash Our months annual and year ranges.

quarter LOE per for the he from expenses some $X.XX up $X during non-recurring QX. of slightly quarter second X% the was Cash quarter, of per was G&A down from while a second Boe as Boe of result

We've both LOE of lowered result G&A a the cash upper of ranges as year-to-date. our and performance end

Relations presentation. earnings on issued Investor XX full be XXXX current guidance in can Our release of ranges yesterday, found or slide our our year

for BXX production IR the Pronghorn Northern updated yesterday pad the We've we plots posted well. in deck Whitetail and Eastern

be to in northern potential results value the our We continue unrealized eastern by to encouraged unlock acreage. and and these

the average XX. the individual for pad updated IXX slide consistent on curves We a into be consolidated to also other the production five all and the curves shown pad with

exceeding at continue type results West encouraged that to legacy are per the XX be section We curve. wells our

oil commenced new the quarterly call, we returned last in pipeline this new July. gathering asset As The late has in operations results. mentioned investment our RMI on immediate

the XXXX truckloads reduction per volumes. removed truck traffic over in to we representing day day, lines, several the per This continues of quarters. truck at improve result a miles XX over As over current next

an received build and oil line Shipped will the improved throughout to continue to volumes third fourth Volumes the of moving quarter per $X.XX differential increased the barrel. quarter. to $X.XX through

of differential oil $X.XX from per down was barrel Our the $X.XX per second barrel quarter. in

this during but also positive line oil portion price lower QX, change to a had benchmark the the A of impact. relates

through and months differential is nine barrel $X.XX to oil prices. $X.XX range year we Our guidance full reiterating $X.XX are barrel per per current oil at of our

will Finally, With in deliver capital to in include I It's process, our a French Lake for wanted program plan for asset. early lower growth budgeting we to comment year-over-year on production XXXX. expect XXXX. our business moderated capital our but that some

that cash We're $XX $XX quarter. million of million neutrality during of and a plan momentum. to XXXX quarter, CapEx our we one that approximately rig builds encouraged generated deliver on will on We're program free flow close with the work for this EBITDA the operating third to

will call for over With operator back turn that, to I the Q&A. the

Operator

Thank instructions] Irene Our comes from you. question with imperial [Operator capital. first Haas

line open. Your is now

Irene Haas

on in color the you. the much of Yes. and start light sort is expect dark when should should project impact? Lake hole we happened money is reason the Hi. My production any, that when French in you question OXY with how for when would roughly and and of roughly reorganization spending over Thank you taking expect the a

Eric Greager

mid rig, We're organization operation start, to in would based years. rig kind rig of operated XX% Yes, I it'll OXY and the throughout net be rig the thanks, subsequent one continuously late of right from thinking Creek on from now moving balance starting our OXY it's the that that will Irene. level September picking late Bonanza up by XXXX think be QX, intelligence best so CapEx a loaded operated

That's the best we've intelligence current got.

a one single to you quarter anticipate and pads, west we'll tail are a big another probably months these month and first pad or So, the XXXX. because could take what wells the be might that pad it's east XRLs, drilling X means rig would or wells stimulation. off so And be of to release X half to what going these begin X X and is, end of at we for have

well XXXX going be well it's as first to So, before the into IP.

Irene Haas

Thank you.

Eric Greager

Irene. you, Thank

Operator

comes Our from Thank SunTrust. you. [Operator Fitzpatrick with Welles question wells instructions] next

line is now open. Your

Welles Fitzpatrick

Hey, morning. good

Eric Greager

Welles. morning Good

Welles Fitzpatrick

to and you internally to that how Whitetail how AX in thinking curves? be there to capital willing Can continues you are about that area push XXXX? XXX much guys now talk fit you up that, might

Eric Greager

Yes, Welles. thanks.

We Whitetail to and are encouraged that continues in we think area. it the de-risk AX by the reservoir

it environment, XXXX we're So, about going budget can thinking is to flow is with shape cash achieve the we our to price best way take working neutrality. the a challenging around free

focus AX considering and performance objective sort be a in to Whitetail working So toward The that particularly that that. the the is challenging. of was performing is great well, expected area the is reservoir

don't lot of encouraged very infrastructure a probably it's by given there. that we're up but it, So, we the fact have

be What we XXXX with be continue is would couple could one put challenging have can for we a together the in to in single particularly The the lot we going economies a be a could don't do from infrastructure we a larger compete it's pads, best leverage. - to well to place there existing current Whitetail. well, budget of and away to the thinking delineating kind we'd on with of miles perhaps where infrastructure,

best year, challenging closer is in the half. we XXXX do see to that's delineation environment perhaps to expect And one we of the to be price so, And the perhaps end in the likely well. in the back could

at about point. way the we're this it thinking that's so And

Welles Fitzpatrick

to you it do I to you East be be one, drill And most you of which you informative? you want you mean, pushing said Okay. would would Would to North. or it. push want - sort were think if

Eric Greager

acreage got I push back that good want us well. can that and on And north. its is the probably west. out, Again, easily it infrastructure lowering north delineation single we to builds connect north we've rights for get of And really Yeah, to even reason think because, west. the burdens the to ease and and Whitetail. away we'd ownership, the that it be might And to

learn the create XXXX much can, as much So, don't well the in but burden can, delineate an budget. you you or on unnecessary as as as

Welles Fitzpatrick

that the you white And my up then, the - you the To Has now. at talk moved if NGL of guys pricing have you land can and Okay. in most. more fracs basin. control understanding filled midstream price than taking more all? are recent cliffs But to heavy obviously

Eric Greager

least pipe And inch that terrible. really hasn't of has exposed for improve just access. are Most at the juncture. pricing certainly realized It is pricing been a to DJ the us more Conway to Conway. at going encouraged in this impacted are pricing miles us realized We're -

in And there it's to that hope can think see continue going to in that continue perhaps but to capacity as early I I some XXXX quarter, the don't is I going that open. be get to know this think it's we be better.

Welles Fitzpatrick

That's I Okay, again. all Thanks wonderful. have.

Eric Greager

thanks. Excellent,

Operator

Thank you.

Our next Ray with [ph] PetroLotus. from comes Deacon question

Your line is open. now

Unidentified Analyst

morning. good Hey,

realizations, of be things last in to or the on you're current would like the be for sounds a question about would that improved. you place terms XXXX Following think level it hoping conservative NGLs,

Eric Greager

particularly, And a the I conservative would is propane NGLs continue I anticipate improve part we're start. do that, think season. as this moving and element will weather NGLs into the country in of the it's colder the sensitive of to place to

So, elements in terms of propane improve continue realized see to I think you'll the pricing.

we will as And exposure a the And to do will Belvieu capacity is pricing more perhaps conversation more think access NGL last well the end we see But capacity. is Mt. ultimate which as just the regardless. the as the pointed which fractionating bit the coming pipelines goal. out, help at little of on to that improve

place it's a think do Thank you. Ray. to I So, conservative start,

Unidentified Analyst

mix tight terms the fairly versus I times there? helps of in does of what's terms a in well like reasoning shift on your guess? the follow-up, quicker, I one SRLs, that XRLs year, big as just And seems next assume I it guess getting Sure. cycle of it And

Eric Greager

a will shape DSUs acreage of Well, various ones throughout SRLs of mix maximizing the both surface our on of function much come the which budget dependent is efficiencies our on that's be and year the the a subsurface efficiencies. and very more our and of raise XRL

is, to the varying also had where just interest frack it's wide-open of whiteboard in So, could acreage wanted we've a we DSUs. number of we constrains minimizing we I But And and to. any subsurface truth options. very got are advantage of varying working wish so take the and piece just shapes careful impacts the we've got we about

in governed SRL. the We’ve gotten to highest return maximizing mix is have the the the an we we budget whether an XRL at profitability try by or where level, total so areas - the pad year, develop that’s so of

number to dependent a it’s continue on both efficiencies. So, and to surface factors including sub-surface going of be

Brant DeMuth

to clear in And we’re process. budgeting Ray, still be the

mix not So, the of guided yet. those links we different have

Unidentified Analyst

one Got you got gone just where and on Brant, through curious, just had directed level better lower you RBL do was have a or great. to it, of I did it, call process? you, yesterday one Yeah more peers that reduced your

Brant DeMuth

a question one. it’s good No, the because I appreciate

the have working our We’re right next that of in we middle our syndicates meetings week. with

be fine early quarters, to I it’s reaffirmation. we’ll think think very last But growth production we’re So, I but probably the good early a in definitive the think is, reserve indication with over give several shape. a you very too and growth I the

Eric Greager

fundamentally have been well of rate Yeah and well cash and the yeah been improving is low. performance has overtime, utilization overtime, been consistent reserve RBL pretty quarter-over-quarter, growth our has cost reducing

we’ll through throughout it year, draw we quarter, use fact, the like periodically working do the and In really capital. repay so

to will I pointed pretty point So, move as think Brant again, redetermination it’s things healthy out, but all of early. those a

Unidentified Analyst

Thanks got it. very much. Okay,

Operator

question Palmer Thank Corcoran with you. our comes next from [ph]. Parks And Noah &

now is Your open. line

Unidentified Analyst

morning. Good

to kind Just a consolidation seen more assets? expectations them basin folks feedback was of among transacting as ask the coming and of the had their their I there. you've wondering about out if on down to far Any as bid couple one us things, in

Eric Greager

through strategic thank quarters, great a of couple we of broad what you bid, a a an big process happy kind take is rather involves that than word everyone we’re kind to have Yeah, tell in and the to over a toward That’s testing I’ll seen conversations. is make targeted come market rifle those. inviting of question. shot the evolution last you. while that participate and a we’ve VDR And look a

backed RMI really inventory really well The much share lot challenge bring a really What is SRL price of share component our does whole price doesn’t to price. potential and is are fair in that gross share or provide and target, our thousand value PDP a if they of these us we on PD share our doesn’t in look imply at can’t relied a so, we or possibly And PDP could afford pay most to imply on our we for sell we’d PDP. price firms really price. at our today. value as upside, our you know, our valuation

gets remains PDP the tougher to and to the script that a there But continues constrain beginning interest sense, as be to is in lot idea more for access that tougher. and capital make PDP

our So, certainly speak direction. make that companies speaking I I don’t generally but currently that makes at sense don’t know that a the the with, point, in I price they’re them, moving they’re at the know just I it’s currently that to across think right bid

I think there’s migrate to in that therapy direction. of continue plenty to

Unidentified Analyst

thing, Great, been you are we thanks. worried that so guys where inflation scenario it’s do of hearing the And any see one assume can tough mean, of the withdrawing anybody getting that service about older say I think or I in any since other any sort our inflation that? term, really the for cost from medium not or equipment. a cost beyond XXXX could equipment Do of just see I rid give you you basin maybe scenario over

Eric Greager

able our been D&C designs cost in to based fact and advantage maximize the consistently on PV course seen optimize we've of or factory of And to to that input take declining. seen XXXX, factor IRR throughout no, we've costs further operation those really stimulation and No, scenario improvements. we've no

happen seen and through kind stress We've test continued as RFPs throughout see and that of we market improvement. we XXXX XXXX, test, into the

XXXX, XXXX. even current beyond XX% our nominally operation. D&C we've We've a been to about relative to the pointing of our throughout inputs And factor in so, in take to to that cost XX% advantage current seen that. XX% to reductions reduction able pricing, RFPs are And

because see happening don't although capacity major where, a of We I've out any of scenario don't about for read about read think market lot it I example, have frac really a supplier the withdraws is - place a taking it. for pressure the has and today, or horsepower a DJ, couple to because I it's DJ pretty under well-balanced DJ. political And years. of that of environment been sense

active the of time the had had a an sort the right activity of we've get were that operator of lot other whereas recent of rate as with a some environment, as until basins so quarters, high up supplier more And and a level really change. couple to have -

I think oversupply to so, sensitive they're the much capacity. more, And and

Unidentified Analyst

at Got seen service overhead looking closing kind or have you in the you. I And area? mean, people help like with combining just to their things of centers

Eric Greager

be we continue the to and put operator and the that efforts overhead be margins level side costs rationalization at certainly to I anticipate of there burdens the on business of service made and reduce on their the in that's of will as some tension every place for a RFP round us difficult a all And them are tight. to round through after competitive to pressure an of and downward community, continue is. because

Unidentified Analyst

so server like assuming out we just environment? bigger one and just And split to constrained pretty but making. fair flat looking Great. last on to deal a continue that, manifested wonders price, bad at are it for them a Is of fairly the picture, guys, say if really do the thing, far? long-term that's praise not $XX operating a range long-term $XX a a For you we to can is same that with efficiency,

Eric Greager

Yes, that is And at I effective environment. think we've got inventory adequate this price high-quality inventory.

I And the in be good continue and certainly today mentioned have to we're flirting to also earlier working liquidity. remarks, with hard self-funded a as We operation.

for we're imply some on perhaps others us. would if RBL, we're debt, We that this price the we weather that can. create can our drawing and whether opportunities these And not than environment time should price increasing net can And and that, longer points. at not

our focused profitability We're really on going working our of scale. program. anything we there overtime a to recognize certainly focused the to We're are business. But benefits lowering really of doesn't on costs that to a also business improve and to discipline lot continue capital cash and rationalize be that, our

we when scale, we so, think think of cash flow. And of

consolidation opportunities we think patient, look in perspective. us will look to at at. remain we of opportunity from we a to we is today, because our way get terms the But of the that's this where so patients an And continue that chance benefit number

Unidentified Analyst

Great. That's Thanks. all me. for

Eric Greager

Thank you, Noah [ph].

Operator

SunTrust. we Thank And Welles up from Fitzpatrick have from you. a follow

open. now is line Your

Welles Fitzpatrick

back one. hop had Thanks real on. for a letting I me just quick

my Is Whitetail, there. interpretation it. know it in mission seem Just the new document? anything close check of that to I terribly to to onerous that, Can of was COGCC, new guys are talk me you reading you sanity change to or your kind that didn't of

Eric Greager

way. I Centerville, and I think to XXXX the reinforce feel it reaffirmation to the really I point same of was exactly mission COGCC. think of Well, a continue was the the

operator and a in we, So Whitetail incremental I the the it Colorado? to has like we emphasis, as any changes environmental and really I to don't think provide an talk was about reaffirm to that how meant energy XXXXX or for community announce to people state is how continue new think was ensure

lot do is and see the of mission think is And COGCC? several was How that. people we CDPHG that reaffirmation recognizes think wider. as fairway I today a middle ago. it place, related of The lot legal everyone good. really it's can of a whole I and points, healthier isn't has to I a a year the and disagree gotten it I frankly, the COGCC what that conversation balance but the on think, And

rollout, did to what and conferences we I And, a work, to sensitive there this to press I CDPHG a opportunity the good and be during jobs think like continue the do stakeholders do accomplish. the work an conferences got that at not did state view think Colorado provide, during COGCC good that if you balanced can think and I and you've the Health good in and was saw press study Study to needs, as

And of regulatory the it are healthy development. and balance of frankly, evaluating to to bodies the taking comes it impact that when a me, it indication gas was, oil

Welles Fitzpatrick

agree it, a in points when have to to a let hop lined I kind on. the quick same pull of you that, that the statement place. response even And much for up Becker, it better with to great. thanks Anyways, study back no, me Yes, and way that's us

Eric Greager

Thank you, Welles,

Operator

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

to So, turn and closing remarks. to the President Eric back call Greager, I'd like any for CEO

Eric Greager

you. for interest Thanks Thank your everyone.

a Conference there. XX. the Well, we so As to on in the reminder, hope end much. see through attending Energy with be Thank into you call. will some going Houston Kaplan December XXth that And go you to we're of

Operator

gentlemen, call. you conference today's Thank and Ladies this participating. for concludes

may now disconnect. You

Civitas Resources (CIVI) 7 Nov 192019 Q3 Earnings call transcript