Civitas Resources (CIVI) 10 Aug 212021 Q2 Earnings call transcript

Company Profile

Participants

Scott Landreth	Investor Relations
Eric Greager	President and Chief Executive Officer
Brant DeMuth	Executive Vice President and Chief Financial Officer
Leo Mariani	KeyBanc
Neal Dingmann	Truist Securities
Mike Scialla	Stifel
Phillips Johnston	Capital One
Nicholas Pope	Seaport
Noel Parks	Tuohy Brothers
Ray Deacon	Petro Lotus

Call transcript

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Q2 2021 Bonanza Creek Energy Earnings Conference Call. [Operator Instructions] I would now like to hand the conference over to your speaker for today, Scott Landreth.

You may begin.

Scott Landreth

Thank you. Good morning, everyone and welcome to Bonanza Creek’s second quarter 2021 earnings conference call and webcast.

of morning, Brant joined and DeMuth, Officer; other this President Eric Chief call team. and CEO; management and Executive members the I by am Greager, Financial On senior the Vice President Yesterday, we posted investor can SEC, and presentation of be the press found our with Investor of a our Relations XX-Q section new filed all our issued earnings release, which on the website.

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

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

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

investors on As call. those in schedule a community questions with I we from reach earnings sell-side questions analyst ask me previous take the to with directly to calls, will and that please to others today’s out call.

website You can find within yesterday’s or Relations our my the release. of on contact information section Investor

and Greager, I Eric? the Now, Eric over President CEO. turn would like to to call

Eric Greager

Thanks, interest today. Bonanza in thank Scott. We appreciate for morning, Good Creek. everyone time and and your you us joining

to to Gas of on April & closing of leave our followed quarter We Q&A. with May announcement acquisition that for Not time of a and X Creek closing the it up Peak XX it once additional Crestone with Bonanza activity will of Extraction Resources and the with HighPoint. keep subject transactions: busy the the our very company. the merger Peak The Oil As positive are the equals remarks quarter, customary on It and with the HighPoint largest second Crestone will of for with a conditions. But two Both Resources, is the approval all in very quickly and create with merger Resources quarter for the during prepared we of announced become X. previous on DJ order quarter short plenty in Extraction began was a calls, pure-play Civitas M&A combined June transactions Creek to second be to ahead plus proceeding and is stockholder two operator. schedule. of lost Bonanza integration well companies are

XX to to this quarter other Our the forma second and quarter MBoe to call. quarter third of guidance decline production of to coming slightly the pro flat With XX.X elect yesterday, oil. pending production did was slight We XX XX% better and quarter we than all day, during given expected our guidance mergers. MBoe had the range XX% per release with a we from day our per to raised limit first our first the to

showed synergy in into I reinforces and we Bonanza posted deliver extraction have million significant the confidence Peak merger synergies. I million yesterday. all from associated successfully $XX investor on due Crestone When our Creek. Our efficiencies XXXX, my we to basis that already volumes to the integrate am unit to synergies, in an improvements X announced merger focus to $XX increased shown pleased from the in capturing in say continue over annualized to synergies. work the shareholders. Slide HighPoint It done expense we effectively November of the ability promised recurring presentation proud first integrate captured across the to cash on to as and LOE, first organization of XQ our well on HighPoint OpEx and G&A we am HighPoint of and RMI XQ with in year value

BCEI, LOE $X XQ. and million for range cash guidance taxes $X.X for to a to recurring our severance to million lowered and of have OpEx guidance Guidance of limiting We to and RMI unchanged the XQ. CapEx $X.XX $X for guidance BOE ad-valorem were G&A except was per is quarter established of million for believe to $XXX $XX XQ to which $XX have full guidance appropriate just the CapEx We of but to for $XX million, range CapEx under brings provided of million million still annual year million. $XXX approximately year-to-date standalone million. $XX we an

related item Finally, to guidance. last XQ one

the per day is estimate our $X.XX XXX.X of yield contributed share which shareholders Bonanza the $X.XX dividend companies the The produced Directors XX.X. earnings the The that for X.X% our dividend ever in Crestone volumes. provided Peak annual quarter. June. Civitas. companies contributed be per on XQ XX per at as to during The at the Creston announced returning pending range that for Given Bonanza the third differential three Bonanza in transactions share to September fixed where and individual oil approximately release, $X.XX, will barrel, WTI, barrel of to close differential those Creek dividend of the of In Civitas the quarter XXXX dividend of per be of begins total Extraction business will to is current dividends. second be per third MBoe $X forming first quarter to oil share to on contributes record Peak. represents quarter. at the quarterly paid approximately its dividend per above declared XX.X $X.XX XX. $XX capital we share we paid Board Creek for current day to a through September per And annual Extraction shareholders previously of closing per with metrics increased MBoe $X.XX certain committed share increased per $X.XX of anticipate and we XX.X price. of strip the escalate, the

early I will transactions that, We progress closing information return will provide the in to call With the Q&A. on operator for merger additional toward the QX. as we

Operator

Thank Our first the Instructions] line with [Operator Mariani of comes KeyBanc. you. from question Leo

open. is line Your

Leo Mariani

bit if whatnot. on see can I to get on we terms to are there Wanted you guys. guys more of obviously be what companies. a vote in three a and know little all Hey, of has working integrating sort color

guys million and synergy working you You I on originally to $XX I did but expected. you put on close these you HPR, deals, this. the have and you guess, in it but it, are that certainly of looks release furiously a target have that $XX than clearly, know press had million target, faster exceeded language kind like some guys fast

thoughts amount of kind just ability any deals? and on these to your on there the update of is synergies So,

Eric Greager

complicated, of would it’s Good is, we to takes would Thanks. complex, morning, all it’s expect, are changes deal And are will you interviewing Leo. evaluate say great What all as a of together. that be is made. arrange – become each a of talents it of are of getting and be in and to but a organizational the today not to There biggest terms the done individual to would the structure. entirely. ongoing evaluating say as energy structure know time will structure what employees we effort three I companies company conversations going that it’s there have and coming have terms the continue And made and of need This necessary the the Civitas terms lot lot of the has that’s new what that itself. around to of decisions how folks in that in be work strengths is is I part a just of we to the be organizational and are not

team’s and both again, got it’s as to And together the just we of ahead decision-making close rationalizing schedule has in our in space around been our execute about great yards ability and has the but this think friction. having much and swiftly rationalizing done. without office happy cultural got have and the I pretty any accomplished done. a deal of place. to have HighPoint plans downtown integration with I ahead in schedule bit of I more talk office the of I transition decision-making around savings, of well, the confidence field work, excess good put savings deal am haven’t Obviously, realized but And much we the great space and a of been little that the synergy think quickly a

around Let specifically mentioned. me follow-up stop Leo there, a what and see question I you have if got

Leo Mariani

after something I No. That’s at just and Eric, fast companies there – was targets on I to close know pretty that how potential And this to your furiously. going roll horse. up feeling opportunities so other about before, assets to thorough, guys but maybe that even you am are immediately guys cart think is kind perhaps belt, at have get sort you deals of are in under you start the that DJ before working are I put you are and the already will obviously, these focused looking of that Civitas or the have, or some that point? maybe other other you

Eric Greager

of operating on wouldn’t of analysis, the to conversations to even Leo, team to Obviously, be to think discipline, you happens something through Yes, pendency haven’t analysis expect technical the tools with core that. technical We anything needs continue our that done. doing analysis analysis We how drive in to the value we and stopped straight anyone as value continue analysis continuing particularly have to behind carried have value core would to pendency with but our we continuing that it’s like we and strategy. during on and all business the work creation do do these looking. business to in is any But can’t we focused can’t any analysis transactions. and transaction, what exactly and basically and our scenes ours the core a be with like

are Specifically, to going continue say would for that I create we shareholders. to value

remain bit If challenging ‘XX, Civitas you an make are we to trading a on and basis EBITDA look does things today, little it multiple disciplined. our going more at for

organization, So, to I pay through not our that more disciplined, of depressed that everyone more And multiples are a means little get would bit when or compressed. the are say we value-creating we things in front because challenging that multiple. going here

the come strategy So, and continue and will a it doesn’t our surprise of that’s executing we the from kind to will as and it we a analysis fact on take call. running there. But anyone

say, can a much with don’t but I and answer. than feel that, Beyond know follow-up to specific I to I’ll free try more

Leo Mariani

of for could very you out robust know the can on sure. to answer situation bit that DJ? I you And here, color No, there current permitting of kind guys, guys I a little was the give a obviously just for helpful And lastly speak more have you the am on sure, in maybe lands side, rural call the going slightly things be type potentially than are Creek Bonanza a little of insight but bit any XOG you some might or legacy less the a do how environment, to on Crestone it, urban Bonanza? more that

Eric Greager

Yes.

We growing dozens submitted the OGDP – environment the are environment and more and all have more constructive. of outstanding. feel applications We regulatory like is those

We cleared these have the municipalities. will, of in the have haven’t received are the very to regulators very but confident approvals, any and channels fact confident to fact in open and that many we that got we already completeness we the

Crestone relationship us further inventory base got the and the and combined teams and in south, company excludes asset Grover. able regulatory permits XXX confident to through feel have And all and then relationships generate government We out to Hereford and going in relations permits forward. team, community The in take Watkins great our and around right that approved moving will has continue teams. into that XXXX will Extraction beyond along relations that be now Western corridor well and the we Peak we

the list. Dover then So, if you included even generally from more we exclude to have Hereford permits, would assets that north, we but those stellar and

there, follow-up let want on if of So, that. me and stop you see Leo any to

Leo Mariani

sure was your for that I and appreciate again I time. think No, very thorough

Eric Greager

Thanks, Leo.

Operator

you. Thank

Our the of Neal comes Truist question next Dingmann Securities. from line with

is Your line open.

Neal Dingmann

considering what’s the I just shareholder morning, first paying? I for Eric. My you major and your these am incremental going wondering, is Good notable I forward are already ask quarterly what I’d all top dividend guess return preferences question days, especially say the

Eric Greager

had to We of the dividend. two And and a And continue is again, $X.XX a cash has the practices kind cash. has opportunity thing for on of the forward and with consequence I once returning would on the base question. The strong is suggest the as allocation of other focused in had tenet that, we not of lots transactions remain a would announced with expanded yet announced capital formal shareholders. board, up – what is would Civitas going – we is announcement Thanks while policies. not of full return second what share pretty and I core have Civitas BCEI policy more to to the say the a I Neil. importantly, Hey, it formed of to conversations Board take

So, absolutely available committed anticipate made commodity toolbox that a think to closer get we shareholders. to close, are of move in have but cash be I phases various once more through we we over every we to as development. tool say about should And cycles to little to business us I will the and the that, returning

Neal Dingmann

Very quarterly good. Nice to dividend very hear. nice. And obviously, is today

anticipated plans Secondly, it like wider on occurs are to spacing well side, just submitted for X, bit though may my you it certainly sounds Broomfield a on on spacing. Slide second question tighter is have some you well all the

spacing forward? about thinking are you how wondering just am I average So going

Eric Greager

stacking, the will spacing It’s we dependent. price Neal, The and is way. we Yes. think along way adjust about

high then invested in we of it the think returns, maximize support maximize return resource So, way is capital the in will a And cash-on-cash rock prices when more we the it, maximizing return porosity the where are in permeability aim the PIRX the per pressure, And better, and section. it. some we can rock. cases terms and think more will metric. But well-developed wells about to to that’s sustain geology, or the and

and also high, And you just about be are we stacking a prices stimulation same we when that the little the the of start not multiple invested. going along in up the are have So will you options about to have the where you you design a down-space prices like allow think just weaken develop we – think but that the spacing set horizons And out maximize Codell, able relationship, we have And and means the bit, run the space. staggering apply you to these that if you – to incremental way. when and run stimulations, drill intervals you capital then if return permits pad, options out these surfaces, opportunity as got got way production economic bit.

be a our particular are So much school a production the stacking same thinking reinvestment what independent dependent in regimen, economic the on like be to return design same stimulation rate stimulation an generated. spacing, – independent return we think shooting about metric dependent that will this about price maximizing and things about kind design We will stacking we dependent and that way rather the dependent and like commodity think variable the for to stimulation maximizing setting particular and about price, old on is as half particular the that EBITDA design and or spacing things in production and independent like of like way than and of think as notionally, or stacking as an cash-on-cash price variables in spacing as variable PIRX. the variable like we

Neal Dingmann

I optionality. think you. sense. of a [indiscernible] lot that Thank Makes

Eric Greager

Neal. you, Thank

Operator

Thank you.

Scialla with of the line Our Stifel. next Mike comes from question

Your line is open.

Mike Scialla

LOE that below there anything there expecting, how guidance I Hey, terms if little sustainable then you you mergers of quarter better you these guidance your that a guess bit look see that what third was might into in were be for good the thinking to lowered close? I are drove after fourth in quarter. as particular morning. and came than Eric, want your we and your in

Eric Greager

I it the things items produced came on the other if briefly, drive of LOE connections HighPoint tend of in connecting routes like BCEI were ahead unit – LOE systems in the rationalizing would it’s to up water basis. that say and of systems, many a I items, schedule to just Yes, terms OpEx-related you. Thank including other Mike. morning, Good to direct and sum connections, and

of is us BCEI one and going better and industrial Downtown And All sense. Civitas. of office build of bit was field, terms the to only moving close space, companies ahead scale and Crestone cash that get time and of when existed I on that board kind little the capture through redundancy expectations. synergies to deal, structure of within footage it we And to below BCEI over grow announced great take think across take allowed in of pointed we and deal and is down these Peak things when QX QX logic there the you there our schedule, a numbers to efficiencies layer better meaningfully of we and just dynamic it clearly, broadly. are also we G&A synergy deal the In overlap. as out the the square And made move when as down that’s these two you direct expect onto and and savings. There XOG, get we just is operational OpEx a of HighPoint. a about similar less more a a But between great those HighPoint, creates extraction anticipate cost

Mike Scialla

merger-related Okay. quarter or And Extraction the for up finishing were deal those merger-related Peak Good. for HighPoint like bit Crestone Crestone those see as than was wanted costs extraction fourth we little – some Peak thoughts well? costs and about a in the like and what transactions? to of for there relative any all might the the in anticipated, And the if quarter looked the look HighPoint had higher I were to

Eric Greager

costs a it’s to of question. from rate good kind difficult Yes, untangle It’s costs. and transaction-related run perfectly completely

the separated. can transaction work the We were lot integration BCEI are you done as the will of there these and accounts And issuer, Extraction But two we parent have the on when the the clearly Crestone we through. and and the forward. in categories carry a costs carrying announced and see our going best, Peak, through throes of costs

running up QX as will Generally had and bleeding of transaction transaction of HighPoint merger merger-related and and tail the advisors legal, merger-related cost to on stand costs, also imagine apparatus, that speaking, end the at to rest see into not starting all probably and it. any on Crestone including well. would didn’t through time that all we I really but of business, down Peak the the QX banking that various just costs we continue sides transaction So, ramp the Extraction QX because all

Brant DeMuth

Hi Brant. Mike, it’s

to up would in been quarter, HighPoint. you with the associated kind what have we be circle $X doing beyond million if $X that second of So, million

Mike Scialla

Okay. That’s helpful.

in at a maybe HighPoint it So, in like be bit your point? this there there guess that is less fair best sounds a quarter. and bit little Would beyond fourth

Brant DeMuth

get obviously, I opinions paid upfront. fairness Yes. mean,

So, of that was large chunk a it.

Eric Greager

– Yes, the done lot the legal is you with SX that end then because as both are on the legal a of paying well of associated that work lot as the And you and go. merger agreements is front filings. importantly, a

Mike Scialla

then one And last me. for Okay.

us we closer mergers, still ‘XX, know any Peak and Just Extraction it’s giving EBITDA are look for guys early what at but at Crestone now that you told I a to thoughts? us production and their have looking the you things accomplish idea be activity you looking guess And in into to that? might quarter, at terms the any what flat? for to I levels, try going should look and year, next of you as are hold we assume

Eric Greager

DJ crews position. three given right still loaded now our what generated notionally a to We reinvested. it’s is have that Yes, production, moving quality run running XX% assets, going operated think pretty EBITDA of much flat a rigs frac Mike, three said with, acreage level-loaded already, this on early. we I am level pretty will stick which and basis the around of notionally

earlier production, are – speaking, feels I about others to around output whole dogmatic emphasize is is generally that. about pretty our but being do dogmatic dependent discussed rate, think We we spacing. still we I not good. I question it is this reinvestment on But holding in some are hold that So, production. like Neal’s input flat, just things thinking not and It’s expect are would

the what are as We that’s to we model be going most that it reinvestment manage to let is We rates. build. sensible think

Mike Scialla

appreciate Thanks Great. I guys. it.

Eric Greager

Thanks Mike.

Brant DeMuth

bet. You

Operator

you. Thank

the line One. Phillips Johnston of next Capital Our comes with from question

open. Your is line

Phillips Johnston

Thank you. guys. Hi

below options. your assume free Just a share pro yield if X% That the we $XX your of forma held question pretty ratio in and significantly a maybe about half what on a pro in of low Eric, amount leverage pro of forever, the still versus years suggests, paying current buyback X% could the you stays know dividend regarding range to still forma drawbacks out. Can cash of table and be cash are you next gas of to a variables? guys all follow-up the options see the the things significant start obviously, X a some combination for forma of key turn $X.XX or base based on or advantages price. flat would on kind towards either might be of or hammer those raise options sort on the some oil, guys stock guys sort over you flow variables leaning that Board return, indefinitely talk Neal’s said I of and obviously, needs you kind the you what scenario buybacks the of

Eric Greager

the on what terms Yes, call it’s – our board, trading returning a It’s shares the free to shares question, don’t in cash would that purely when to And the but own statement. one are buying it’s highest back matter they front-run are our our recognize how capital Phillips. flow. to by allocate a opportunities. I one recognized want that be have the we of capital that compressed of bargained. we today, be tell may, you you pretty is are And uses that a also fact, most can way surprised in no allocate that I of multiples opportunities compelling this of great

our own can if doing back we shares consider we at wouldn’t a so. So, discount, such buy why

the that, they be are really to But terms in have opportunity. ineffective really always like lows to would It’s share cyclic We can. the in of been down timing to I cycle. of again, want at historical to is how have we shares of, you I as out as performance say, of we we today. don’t XXXX that industry terms back the this dividend. in that – depths as So, be Juxtapose much opposed counter want buying put there. when the repurchases our

some I else for, you the will think for it’s either flexibility What ratio make pretty of post-dividend some it because debt. cash a sort you going purposes. leverage it tools vis-à-vis it’s return might construct. that on argue basis, say would use special flow variable to are shareholders your over-equitized, consider to to Board of pay-down or of strong, does but since And give to And also debt I use generated free debt already I one one cash we think lower. or in are these low our sense is a to our couple wouldn’t and it only run

capital is where optimize leave of structure might to we to So, find other return it to ways kind cash and shareholders. our it

remains savings hammered have by do said why when share this our for our price But the is Board. is anything a buy be important out pretty value, All I that’s built think of I and consider below I really it’s to controversial substantially in capital that repurchases, intrinsic because particularly think discount. at allocation market not CIVI us don’t just to really fundamental back strategy. yourself

Phillips Johnston

appreciate the you with would said. answer, and everything much thorough Yes. I pretty agree I very

X close second there rate? quarter just the assume should have three uncertainty purposes, given In moving similar haven’t But parts given will add fourth volumes we some guidance, And QX. good up for the the or you would a the an modeling look that entities second October sort of and I of put is little of of quarter that that assume there QX when on pretty or those for bit on of maybe a run closed. QX quarter just just are guess, we higher kind terms lower than fairly obviously, obviously, picture deal us anything

Eric Greager

in built think No, season the were push I I savings of think them from comprehensive starting stub providing after you, then would probably guidance models it to I more it but I ‘XX sometime close that’s you moving guidance, and it pretty starting synergy to get together, period after some that, And run want synergy were actually what want a in I and in and that’s savings and But then three separate – not is we capture anticipate suggested, pretty a close do take doing quarter fourth I QX. out. you forward. I quickly. too the moment then to providing today, long shortly if good, after throughout up exactly if I like And sprinkle Phillips. QX, them would we But

Brant DeMuth

would I the XX-Q what’s is just forma. caution pro a to that meant be Phillips, in not

Phillips Johnston

Yes. Yes. It’s parts. a of sum

QX. And of guys three clarify not the in adding am If I then a a to rig is are count. on the today rig Crestone Okay. just who out the running one mistaken, you companies, rig really only mentioned and

that correctly? So, program would would not a about a two-rig sort to a or that am I be of on – thinking pro forma basis, that be going

Eric Greager

I about it correctly. are thinking think you No,

entirely rig. will that entirely likely their it’s pick up continue a likely will both that XOG think I BCEI Peak running rig. It’s Crestone and

So, it fractions. will be probably

because then running is full the course, the three be two each rig now to for But I full want what each one wouldn’t throughout of quarter that’s expect. of right And picking rigs up it’s You carry likely for frac for to the crews. companies. BCEI quarter

think that frac Peak. So, Crestone a you well. will is want to XOG in not crew about as But running

We frac future. a crew in the will be up not-too-distant picking

rigs we will pace. getting up after kind approaching after getting see close, us quickly. that I within that and start after weeks of pace picking a of will you think close, be couple fairly shortly – So, activity

Phillips Johnston

Okay.

like the maybe end by program the three-rig this between of a three year So, companies coming in?

Eric Greager

I think so. Yes.

Phillips Johnston

perfect. Thank Okay, you.

Eric Greager

Phillips. Thanks

Operator

Thank you.

of Seaport. line Pope question Nicholas from with comes Our next the

open. is line Your

Nicholas Pope

modeling. comes kind – bit left X.X about been little question, it’s restarting talk morning up into a kind to Can Kind we rig in the mean rig be of Good maybe last costs I it’s to of when production to that drilling. kind team. drilling going the actively following what a of assets, since of on XXXX? that maybe years help and on you company you this where with in rig drilling Just last relative your had when program rig were goes that we are where like

Eric Greager

Sure.

for the foot bottom SRLs. on We BCEI lateral maybe will the per standalone running basis, at goods, linear be a BCEI grade of acquired anticipate of am HCP the to XRLs tubular I X.X I So, oil going or combination on alloys, production particularly $XXX call hardening of bunch we foot. country it, the, a That’s That’s market, lateral and the casing. $XXX, in XXX the per of standalone.

bottom of course, we our that And in the XOG D&C for continued Peak development. confident. also and pretty are of us So, we through the at bought with and market, startup. But us, carry their Crestone particular, will pace that

We all through are Dean through guys utility the operations have ourselves, have right we and maintained I And the here players at of I, table, utility D&C our our Dean but maintained – players. organization. and sitting engineers are Dean

So, capabilities we the of capabilities of maintained at we have XXXX, a reduction April the supplies the did D&C any in way, even in bottom of some of along bought really haven’t the our given we though have back force and up market. we all

particularly I has their rig really maintained feel where to and off. our start pick drilling left Crestone And Crestone right activity. So, good ability XOG and about I Peak – think up we a Peak

very So, the right right are it in of confident I same XOG’s that team pick for we, BCEI, fight trim am they now. all reasons And are ourselves. sort that confident can up

Nicholas Pope

is bit, French Lake going That on a sense. activity Got the there little is makes asset? any update just where on it. back And

Eric Greager

use out we surface COVID, Lake. just development. into lot it with XQ continues we forward. And Yes. pace recovery. there new agreement feel us began don’t mean then with of good And operator, his as question. access incremental But the and Selby a and It’s I the of of we slow done progress by just the then also at it’s have Mr. to out, and forward those to making of that shifts moved XXXX, worked and and discussing with that as to work OXY, French executed, we restricted French because of through is got making. to to continue the And both in work is to OXY have pretty details there have hammer just ready we need bites. we the folks details make small is meet with we slow conversations been great a But continue progress. be forward. Mr. with And about what been were it. in incremental and to and progress a very progress to owners moving anything good We representatives That’s terms we and I have continue – into be out surface Lake and massive a Selby on continue owners. in report relationship, are and out

Nicholas Pope

kind with really in Crestone a then there great. I cancellation. $XXX forward? there the that and to all Civitas with is is I comment associated of about debt it’s going of taken million not side. the just one that want last deal kind That’s Bonanza sure metrics And care understand of and of thing, Peak Creek There correctly. make the Is

Eric Greager

is close, will is before Crestone elimination because eliminated details than will and Peak are I It but Accounting the is our Sandy basis. at closing. it Civitas at understand that certainly with Officer ownership But and the carry to – Yes, she happens be I me, of better have here do. or through private. think combination in BCEI route Chief here and they on a way I and an structured to not got

Nicholas Pope

you. Thank Alright.

Eric Greager

Thanks Nick.

Operator

Tuohy from Instructions] line Brothers. question with [Operator next Parks comes the Noel Our of

is line Your open.

Noel Parks

morning. good Hi,

Eric Greager

are how you? Noel,

Noel Parks

How Thanks. good. about you? Real

Eric Greager

We are doing well. Thank you.

Noel Parks

about DUC was discussion is a outlay plan of And to economic opposed inventory it sort I the advantage cash are for you was cash a from that of terms talking just to either versus hear viewing of completions. favorable a of Good. for on sort design a about or just to using judicially take time came the that pricing when of in reason as sort of that service or earlier conditions. bring of board to your costs good general commodity near-term at frac separate mind little for budget the discussion prices to intrigued your either managing

Eric Greager

of front I’m building a into at plan. What’s it essentially, say of development out going to very end those is, that things, the approach Noel. starts it’s built all

are out plans built development of assets. these course, to the the life end Of of

behind land last that development if you’ve is talk acre engine, DYNAMO development built of that based drop curve, life. plan. of physics on will engine, commodity IP special acreage a at the we the plan is to basin created of DYNAMO creaming an nowhere and last and based a dollar the is generate where we to prioritize to end no we’ve at We bringing It And forward our or to matter look DYNAMO decisions, optimization across these calculate hair will the runs optimized current buried BCEI. your last curve which on front factor heard will the economic it developed. for and And call the all where that and you core type runs me on the input. depletion we that best within today, price invest the within about economics capital our So of Civitas out – way a all to capital, out along can back we it’s kind current well and

it, our set as both support that predict And run zipping you fewer will wells, you and out price you way, than So then cased wells a necessary might necessary. return up, along set the have both that’s that optimize surfaces model we if lean revenue stacking prices after out rips ultimately development be retreats current. might up you’ve with section. fewer others more price intensity cost units density calculate it model dollars even we section, wells And that’s you DYNAMO current surfaces. out And design. per even these those DYNAMO production plan, the right? returns the So a And we want And through you set cemented municipalities at we option necessary you have meaning meaning slots you will you’re or if and the forward on per the interval the COGCC stimulation meetings TD just it spud don’t you require have have tend and and higher the invested. prepare surface, to per pad larger as together. and that because, will in way the the drill maximizing costs, into because designs back wells still off don’t spacing, stimulation to back economic event DSUs the and is with can work can wellbores, the we all we again, and while all permit those to maintain stimulation an options to and opportunity then higher If as intensity But then approved. and drill more if spud have you with

a to like last last you and down artificial But this of move stage exercise effectively the still very you think last very the the stimulation, lift you out options So as getting those that of you’ve when very heel and the very series the have road, designs. well ultimately then last opportunities. run

long return. returns as on vis-à-vis, investment we moment. regimes which running pressure making incremental management, management think reservoir based possible option and to very driven maximize as your and And all that by still this playing out – the You a at every on options way pressure those dollar basis maximum choke is have about that’s we’re

Noel Parks

a Great. have than analysis or a either themselves Crestone granular Bonanza is – I am just curious, been what Creek was is more in-house? DYNAMO that doing doing with extraction

Eric Greager

different because principle, together we’re relative and but strengths of It’s three in bringing of companies. these the general the in companies Yes.

Codell higher side better You’ve very developed in much of terms. west along thickness it’s the pressure along deeper, got, all axis. of in assets. very, developed it’s are in better kind quality right the It’s plus western reservoir. its and petrophysical the the basin, flank both the It’s synclinal and along the strong of basin, the the of particularly Niobrara highest horizons It’s hotter, it’s

much and So higher assets. practices great we’ve you’ve along terms we quality Flank as Peak muscles the West those got operating from nearly as those government because And rural higher-quality and BCEI area didn’t capabilities, the a the we relations have also inherited in operating teams the and along Crestone folks those Eastern were two community to people, build we’re in operating, strong of They teams. ESG, assets bring XOG bring western HighPoint, along great we corridor. more

companies necessarily I two through in the and DYNAMO say talent-driven each organization, technical of undeveloped that the But I we best we’ve just what out around I rock. of And access think operational we the working quality to was don’t capabilities and that all how And those am the different impressed ways. these something better is to transactions So organization. strengths upside our Civitas planning. development at resource, can the and terms best add together a of of with bringing I and operating of that lean, practices in pendency company sophisticated think – strong western got you, and running BCEI. when south better resources the that’s very options in unique it’s Watkins the the those capability. all we’re and flank the unique into bring would teams is specifically plus now tell the along developed together, to And you was But by

in is consolidation. that bringing real so, strength this together just all And a

Noel Parks

just more was go could of effect, that drivers just a the just I housekeeping, one-time the the a I’m up And kind for if from of just here? we expected. bit than about And you me, bit wondering the Terrific. if last operating of quarter, might had lower and midstream I expense of potentially talk good a see is that. wondering in one in it came

Eric Greager

got here Sandy Scott to Yes. Dean to Noel, and right attempt now, and going answer I’ve as I’m well. that and

about a a equivalent of really lot of the think RMI gathering They and and booked charges gathering And accounts. OpEx you’re remember, operation it’s the when RMI. accounts, HighPoint BCI, didn’t it wholly talking working I’m have That about. We together owned I wholly of while we to think, will owned and in an HighPoint set of set LOE. is a compression a compression pulled

up went the this. And LOE that booked couple back compression you’ll And can see a incremental look brought charges we HighPoint together, and the last of and quarters, to reason BCEI and actually on so because were when unit brought for LOE. over that recall through basis. you was you’ll HighPoint gathering and

quarter-over-quarter But an of to to you or two necessary call OpEx, those before what going got line compression expectations Now them the benefit one answer you it benefits we RMI manage two in you and because and you put it’s be booked didn’t and But up. RMI And efficiencies the LOE sum and will different RMI on of after those to the the one RMI look advantage continue taking with OpEx are since, we’re And sense. them dilution direct over like parts look if make BOEs a basis and of transaction. we’re or midstream on was going from will the took and gathering the come that of Does denominator, the together, synergies down all together, have think efficiencies. basis it the entity, before the but add cost and as time you’d in then if the unit down, the starting accounts went specifically to you two that together and or when expect. an OpEx? another Meaning question combination on unit down synergies. I the manage to natural of that they

Noel Parks

does. It a lot. Thanks

Eric Greager

Thanks, Noel.

Operator

Thank you.

Our the line Deacon with from comes next Lotus. Petro Ray of question

open. is line Your

Ray Deacon

Eric morning, Brant. and good Hey,

Eric Greager

good Hey, morning.

Ray Deacon

I look talked side I talk I August, like about when the gas the over returns the had moment. if in could what I just of strongest the quarters the western extraction kind you the was the about you deal And back announced of you a being couple of are basin. X%. a the prices at noticed recall question. economics wondering on

Eric Greager

is X is BOE is Ray, pressure, with boy, worth it, these there because And strong are lot higher in and of days – Yes. just deeper, brings because so maturity are They yes, wells short, Those well-developed I it’s too. oil big million those these a resource. yes. curves. – worth worth days, gas – something NGL But something these energy is type which are wells. they it’s something are that are are much today, I really thermal mean, gas mean, they a strong. and And It’s these all curves.

are at are these or actually XXX% basis lateral XX,XXX, are in curves to make created that resembles larger. economics IRR even going latest cases, of be our the those And that longer, type going skyline the to we lengths, you see strip. some of in an or north today’s Some anything creaming which on even rollout curve. material launch can deck, The where

inventory that that noticed scale It wanted. because all But last truncated all our gets too Slide kind we You that. on far well of makes on went Peak. create that’s of north all it of the because rollout the Crestone plus And Civitas the XX sense. that we we truncated side of deck, XXX% one left that it’s didn’t of at curve, to want featured

Ray Deacon

of the is basis Great. that? that, on last the And to XQ, – one, increase that what are widening is one – chance crude drivers the a of there And reverses? right. just there Right, the in side the X.XX%

Eric Greager

Yes.

noted, which you’ll notice that So I in we think, our XXX a was deck. strip, investor on marked

the in generally this basis speaking, a strip market of move escalator because well an It’s as then, actually actually has think, the the down of deducts around but a to here. But higher do that and it right as of function strip kind as and is we White sales pricing bit as come stayed but since contract, midpoint the today. little around. Cliffs as bit TI and So clear the little way well it’s some other of on implied range, this escalator little is basis have White not going We it’s has range Cliffs well. a would prices be with just wanted our that by where to that only are we everyone we than $XXX a just expanded today see oil gathering they if

Ray Deacon

thank Great, you. it. Got

Operator

to like Thank I’m back Eric would the in closing over queue. now call I the showing further for remarks. turn to no you. questions

Eric Greager

a for at on folks will team coming week the and down I you. Entercom have with extended thank to be with to to up wanted Happy us time. thank then, we And today. or wanted at I that will sit to just Civitas just in X. the us want call I the joining we everyone point out

So then. to more we little a will be you everyone. day. into able Thank good detail a go bit Have

Operator

conference gentlemen, this Thank concludes for participation. your and Ladies call. today’s you

You may disconnect. now

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