AMPY - Earnings call transcript Q3 2017

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Operator

Good morning. My name is Andrea, and I will be your conference operator today. At this time, I would like to welcome everyone to the Midstates Petroleum Third Quarter Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. like Mr. turn would to call I host, your Instructions] to the now over [Operator you begin. McGlynn, Jason may

Jason McGlynn

Thank you, Andrea. the Midstates Good morning, everyone, third XXXX and quarter earnings call. Petroleum welcome to

Sambrooks, make the the I provide today will Chief on finally, will closing Officer. begin a then remarks will operations additional and And we some David appointed David the brief me Joining overview Executive is David of and President comments our financials. call some take and opening and on questions. your with details newly third quarter. will

discussion Before in most for turn safe on actual forward-looking and we measures risks. the conference yesterday’s the forward-looking to the are to refer a please with these to get XX-Q statements started, With to call statement. in contains measure uncertainty, call earnings projected financial let and results this of shortly non-GAAP me statements. will Please may release. that subject read David. call be I’ll discussed Form are tables filed risk that, the note harbor Midstates’ directly our differ and GAAP these materially in that which assumptions, comparable those reconciled any and over This SEC Also, from defined

David Sambrooks

good thank everyone. Thanks, you Jason, Midstates. and joining and for morning, for Thank in us today, you your interest

I join Midstates. to how am First, excited let expressing begin me by

Midstates believe of an am the I is platform that has One for main I growth. reasons, excellent because value here

and strategy creation articulate realize our of our My Mississippian and our improving flow be financial on and are substantial will liquidity, Simply maximum to focusing on objective we our Anadarko stated, that optionality. very all debt have strategy and develop in further we free near-term through execute regarding reducing Our cash is flow, activity, primary value alternatives executing to large process improving generating to drive value. low costs, and the to core Lime assets. generates position the cash significant strategic position to strategy in net potentially

substantial and and focused a I’m flow our Midstates very opportunities any been to place fresh deep over free little resources, set outstanding a this are disciplined a is and team, only investments. be in detail I’ve for liquidity taking Our as precious with cash eyes. a CEO operational with reviewing with but intend in and we assets technical background, dive our of and Coming from a week, and a very concrete story, full ways the and the early next are to will but long-term moving lot value current chapter value improve exciting of of operations beginning that drive the improving fun capital of creation. returns. the ahead urgently only of with confident It’s our actions we to Midstates to me. already for opportunities I’m company saving cost days, It’s for but options opportunities, we find the demonstrate

that to like with results. move the on I’d to quarter introduction, So third

We third results in are or deliver to we continue better as on quarter than expectations. track the within

third quarter approximately adjusted generated guidance our the items better than year-to-date and per and $XX approximately Our We XX,XXX million average all or of was production expense EBITDA, within BOE are of ranges. day. yearly

Additionally, quarter. third book our we build during continue to hedge the

per at second for our reducing cash commodity we protect the oil still and any price is while $XX XXXX have XXXX price flows participation downside Currently, on strategy layer base WTI or quarter hedging hedges over risk; hedged movement. stretching allowing all a in of nice of through Our focused barrel operating higher. throughout meaningful of upside a XX%

per of approximately MMBtu quarter through $X through MMBtu a On at one hedged floor of the of we production gas natural hedged and of first of over XXXX have quarter a floor XX% at side, per of XX% production the XXXX. $X.XX

the Lincoln Anadarko attractive us we optimizing with our County in On assets. on Oklahoma, alternatives also assist the STACK sale an our fully Basin in Miss SunTrust Anadarko strategic potential focus to to hired for Northwest and County, front, The us Lincoln Lime strategic and our assets assets would we price, noncore exploring sale at of assets, coupled allow of the the opportunities. completed sold

the more addition, In liquidity pleased will provide in the increase potential the value. results to I’m with In even enhance shareholder optionality summary, quarter. in third

be on we McGlynn. right With that, demonstrating strategy already work and in We’ve the over the strong short to from. and turn strategy tangible Jason executing our on I’ll a begun are on track to progress platform We order. have will call

Jason McGlynn

up the discussion company’s our of Thanks, an sheet follow balance and David. update updated provide our on then with begin third our finish costs capital up quarter. and and and with XXXX earnings investments I’ll highlights operational with I’ll discussion a guidance. the from on

Miss Basin quarter. Lime the mix per the The quarter line the our balance properties achieved assets, properties. production David with As XX,XXX volumes quarter. BOE daily XXXX, or production natural lower gas, of by company’s sale Lincoln from the roughly mentioned, down coming day approximately per in The the with we XX,XXX third NGLs the during quarter of day BOE XX% per oil, third production for during X% average contributed was in approximately from third of XX% County and the of quarter day, second BOE the quarter-over-quarter. was XX% Normalizing XX,XXX previous XX% our Anadarko

adjusted net expenses. to for we our new a second I’d The quarter of $XX.X signed increase oil contract the our totaled the the was quarter, lower XXXX And We differential. gathering in XXXX due approximately June from like oil and in second $X.X in Miss million Third to up from generated million Lime or $X.XX assets. quarter. million primarily quarter highlight operating lease also EBITDA share. $XX.X during income workover per

to versus our barrel barrel As the approximately oil for has down the $X.XX $X a result, approximately and total per for trended differential Miss WTI per company.

items. expense to Turning

on $XX.XX basis from to and restructuring $XX increase costs, second which a G&A primarily XXXX, or in exclude cash Third operating severance taxes, or but minute. $XX.XX totaled slightly LOE BOE the include million taxes the in advisory quarter million production adjusted per in get due up $XX.X of per a we’ll to BOE BOE, expenses, which quarter and per

operating for $X.XX million reduced lease $X.XX per expenses and in prior or rentals and Our The or decrease chemical equipment totaled quarter BOE, $XX.X BOE million quarter. per was from to the the workover spend. $XX.X down due quarter-over-quarter less third

quarter per $X.X gathering on and July of gas and capitalization and this at compared adjusted tax second quarter. new XXXX, or wells rate were per properties in such Third nearly in capital the capital the increase invested to tax quarter from spud approximately third XXXX incentive quarter. totaled other X, in or $X.XX rate compared and Lime, non-cash to these to or million, or measure This quarter. brought that quarter. nine on to Severance the $X.XX $X.XX $X.XX $X.XX in BOE, the expenditures second Miss million, compensation was X% Operational $X.X law taxes in in online. per per were into compared expenditures all quarter cash wells legislation commenced new quarter certain BOE wells the increase With before to or respect production G&A XX previous May is $X.X transportation our signed were wells million X% $X.X million, average to a third any per million oil After came expenses In to $XX.X which caused XXXX. million, BOE, $X.X BOE, the million, cash the and X% BOE, items, to XX-month G&A, the July where excludes rate production non-recurring up X%. the $X.XX period increases $X.X development for the between we to Oklahoma that were per and on ends, incentive tax tax X, wells BOE the and during rate or

performance average the the this $X.X benefit operating standard Until per increasing million of well normal we to to the of of in RBL $XX.X three XX average consisting approximately cash $XX.X the million program we XXXX a complete At on at stages of stood from Liquidity cost the stages quarter continued facility. of of and number approximately million Miss third million. from full as The for $XXX.X results $XX of cost stages first to half increase the the from the many million year. XX this on have completion. million the was million, at approximately our initiated approximately returned evaluation well of options to in to the XX and end in During our during availability pilot million as exploring cash approximately frac cost of third per stages net well, Lime $XX.X the first wells. and On program $X.X quarters end quarter, the of XX well the $X.X our debt approximately maximize in year-to-date quarter, per balance pilot had we sheet. program, we pilot of the to

Miss our for This the November the assets. triggering of on further Miss of we solidifies on million borrowing Basin Additionally, had and Anadarko base the without borrowing assets an automatic X, at allow assets our Lime of been redetermination reaffirmed will Lime announced based solely value the $XXX base. our sale

our $X.XX well expense between expense the BOE and our BOE. between and CapEx other back XXXX range to to taxes full David G&A for and XXXX operational to following lease $X $X.XX per per the and million day. per between Consequently, cash to $X.XX between and Finally, per and guidance. $XXX and $XXX to that, and updated ranges closing to XX,XXX production I’ll $X We turn over with as and for narrowed severance between I’ll With BOE, our gathering finish have per between $X.XX workover for BOE transportation comments. call up the items: million reaffirm BOE, adjusted $X.XX guidance operating $X.XX year the XX,XXX and to tightened expected we as

David Sambrooks

Jason. Thanks,

acquainted in off As get team, operations. our kicked to I assets our order myself our an and properties fully internal and with have of review extensive we mentioned,

on high our grassroots Midstates Lime are to avenues the in improve This more our be will development be detailed and excited reduce grading as going exploring and will as constant we base we our the optionality our be annual a XXXX. I budget of have ingrained we looking In significant development especially opportunities production culture. focus review further opportunities, forward optimizing at Miss costs margins. will work serve forward. expand our not ways a for review, on advantages, organization could determining our liquidity to for create and this go-forward about base of This good going for to and closing, value activity, company During our focusing

we’re our liquidity, creation questions. now ready cash flow near-term free forward substantial costs, with We improving and of are Jason, urgently value With strategy maximum and optionality. generating realize activity, take reducing to moving that, focusing to

Operator

[Operator Instructions] Amer and comes And Tiwana with your the from question Cowen Company. line of first

Amer Tiwana

morning. Good Congratulations, David.

David Sambrooks

Thank you it. appreciate very much. I

Amer Tiwana

couple big-picture I have a questions. of

strategically portfolio, there first still The one, a Lime think you look strategically? in are portfolio you think region? question. we the this to assets the do as into region? can do That’s in see back Or the – how Do buy my go phase at opportunities Miss you growth you first

David Sambrooks

Right, we right. that options all really I of definitely the mean, kind think, I of have. Well, above are

I of we’re think still on everything deep to Miss the kind taking Lime steps we’ve and on talked focus that table. about, dive that the really do the the is

all the at what opportunities looking the through basics are. the really We’re way

right like direction It’s in the still days, we’re growth be the of But could Dip]. we making next dry really we table it’s an best kind but that feel from all looking that can first of now. we’re to if that – kind now. kind deeper. asset. returns to it on Dip] of days. wells have story a [Audio attacking into the is certainly right there, front the of need first, kind little rigs at say And and make it’s the everything We early exciting powder of a [Audio that’s at sure we’ll that think, possible we get I things is bit And generate. So early putting everything looking we’re I

Amer Tiwana

your expect new concerned, completion you us? or results some Got as some new far it. techniques can with And we share data when can as are when

David Sambrooks

has changes, Midstates for to Yes. at a the you stand number you of – and is you new any way I’m of want Right. for certain – that the on now. really or then period that completions do completion, the what looking right evaluate and back Typically which attack change a done time.

time. more bit appreciate probably of initial can so it’s just how of affect It’s a little kind than the it what that rate takes You the is. decline, does

we that have Dip] take what step the design completion over can time. a old bit [Audio So period to team, of little back the longer so a the look at done

dive, going would to everything for I to thing past we think taking are steps the that and – that next – of our is got. on the and the forward what again to be completions. think that’s done subject do I what need the we we’ve at deep on what the we’re as we also in a add we’ll we’ve look fresh Just start And going see probably that complete wells to inventory need

Amer Tiwana

Thank very you Understood. much.

David Sambrooks

Thank appreciate you, it, Amer. I

Operator

And Coker question Palmer. of comes line your David next with from the Beard

David Beard

some Good how what internal morning, are and acquisitions about we’ve gentlemen. use? growth you initially, of this. allocating and you covered capital But I know might criteria thinking between

David Sambrooks

here. got I this we’re few kind of on the got near-term but me hear we’re to focused increase steps Well, only you’re I laid really we’ve just – going out near-term strategy, as think just a say one I times. liquidity. And I say get our to chance here, on to

I underway our kind think for sure getting the it. activity, those. of make of we’re we’re And several well then of on maximum to is return focus near-term other strategy the that tenet

and to step in through tagline The front of then optionality allocation. and in we’ll future. very see we’ll in So we’re short here us is for the on pieces of terms options strategy have going the those maximum

David Beard

an makes or the acquisitions again, difficult acquisition? basin out basin the that a think outside No, basin said Okay. or, a you how sense. question, risks or on do going more way, And of another opportunities but in of

David Sambrooks

can mean, we’re think Yes. the definitely going that to time study we all potential over paths take. I I

that’s think for optimize near-term. focused first start what really we think I really to on before the me, is and I’m those we’ve paths thing to about got what

more what we we’ll see we’re I the term, have going more. else. more next, and the it on think, [Audio on great can I whether with a on alternatives think have there’s it’s the what’s something robust can in And great us I about Lime, allow think – the focus we in to the Dip] that optimize do to potential first think how And Miss even asset, in longer strategic job, basin has Anadarko done with then even or I more the more asset medium, liquidity. discussions

David Beard

All I’ll forward right. appreciate it. strategy I look to the seeing unfold.

David Sambrooks

appreciate it. I Thanks, David.

Operator

over closing like for you, turn thank the ladies to and would gentlemen. And now management I call to remarks.

David Sambrooks

Jason. Midstates. Thanks, times Again, for Okay. at and you to getting started, Well, it’s forward just very to communicating interest look calling thanks, everybody. in Thanks, for we’re but everybody, more your soon. exciting us. And we

So much. thank very you

Operator

and Thank today’s you. Ladies this does conclude gentlemen, conference.

You may now disconnect.

Amplify Energy (AMPY) 14 Nov 172017 Q3 Earnings call transcript