AMPY - Earnings call transcript Q4 2017

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Operator

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

Jason McGlynn

Alicia. welcome fourth call. to you, Midstates Thank Good Petroleum's quarter morning, XXXX everyone, and earnings

will President today with and begin overview financials. your our will then of take financial David David call provide David and an the make operational And comments I on Executive Officer. finally, me Sambrooks, Joining and some operations our highlights. and our additional Chief will on we is questions. closing will details

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

turn the to David call for his comments. over I'll Now,

David J. Sambrooks

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

Midstates' fourth was measures quarter For our all XXXX, strategy. the performance on we in on and by target market-focused started executing

average yearly than were approximately of firmly BOE XX,XXX yearly or was per expense the our within items generated quarter production In adjusted EBITDA. million better guidance fourth approximately all, We in ranges. quarter, $XX During our the day. fourth capital and

realize review and targeting free value of reducing a creation strategy maximum we my our Execution in upon market-focused strategy operations, market-focused to and and generating and well near-term quarter, organization, CEO last set November, mentioned is assets, initiated costs, flow, liquidity, internal underway. an extensive our as optionality. improving of cash of activity, As appointment

cash the staffing current in program in a production G&A level, XXXX our million adjusted targeting and in $X one-rig March to our Miss performed with Lime our our flow. thereby develop align count asset two-rig in a cash reducing annually. order reduced rig early generating $X to to late our We million force have flat free from prudently activity January We expense reduction to by levels and

our employees We of have by XX of a those employees, XX expense. reduced from office being operating and staff headcount largely overall staff XX% total XXX XXX by field in to lease captured by will million We million, $X paid and XXXX, down down to approximately million. March $XX approximately outstanding early our debt in interest annualized $XX RBL is expense which reduce total

evaluate the within continue final thus a properties far program in our strategic program. We next or the decision producing expect selling of completion have alternate under six the Miss evaluate to Anadarko XXXX designs We retaining to Lime and on pilot few and Basin the this weeks. on alternatives completed initiated assets wells

program drilled in well drill these time forward profile and been as remainder reviewing go short design and has This determine would uncompleted for of we are in We for result to wells our of individual the XXXX our remaining our our five could as accounted order. results to work in will all this early completions, larger production but variability completion guidance. some but increase cost due well in XXXX

scheduled Miss Lime drilled asset Additionally, completed X-mile by we'll our be X-mile testing be to lateral with and laterals first our on mid-year.

committed reserves within of during for to to year-end to non-cash of one-rig created had as quarter. the our undeveloped within development activity five-year forecast our flow, activity strategy future. reclassify foreseeable to this program drilling impairment a proved fourth we onto $XXX to the SEC portion in which we probable, rule, a million cash Due reduce part reserves, reduction Now the our to

were PUD at year-end from XXXX XXXX. Our XXX XXX year-end to bookings at reduced

In reserves oil gas. Utilizing Additionally, our strip as $XXX $X.XX XX% XXXX our remain well X, the SEC approximately with per proved our revised pleased All Details results is flat reserves our Gillespie, Cawley robust type XX% type we the see, type IRR revised ended pricing, during at of and summary, curve in, down engineers, case you as can of by X, in Slide having proved third-party at pricing shown of XXX using with reserves. of $XXX XXXX PV-XX a million BOE, and approximately on the SEC million. of was economics our PV-XX curve XXXX. determined curve, million. $XX change I'm March are approximately

We short in strategy. platform tangible have market-focused demonstrated have on and good a order to progress work our from

ahead We are excited Midstates. what for lies about very

with that, and over year XXXX on quarter call Jason our full details turn Jason? to for and our numbers. Now the fourth I'll guidance performance

Jason McGlynn

by properties. per day, NGLs, Basin oil, Miss quarter the XX% our had or balance capital balance previous on discussion fourth ceiling-test impairment investments, the we day sheet with million. Thanks Company's and achieved up gas, quarter. production per with BOE update from net and of $XXX the share virtually finish with XX% then production Company's the driven quarter properties of flat David. BOE XX% numbers. XX,XXX and quarters. XXXX, per XXXX during with $XX XX,XXX I'll Lime of per mentioned, contributed with I'll daily a begin XXXX, The and We $X.XX XX,XXX a or our discussion in quarter day provide an loss guidance of a approximately The of a year-end fourth our costs, third mix XX% coming in David during and on was line non-cash Anadarko BOE for million earnings the roughly

adjusted prices. was the of to XXXX higher the XXXX million EBITDA in lower quarter full-year $XXX net quarter, approximately primarily $X.XX have approximately XXXX and income would been in from $XX Excluding The Full-year the was million. or impairment, share. up $XXX generated $XX million increase X adjusted per the We quarter. expense from during million third third due approximately G&A commodity our EBITDA $XX million

per totaled adjusted $XX fourth Turning million $XX.X expenses, XXXX. which but and million of include to advisory BOE or restructuring LOE, operating or taxes, quarter expenses, production per in $XX.XX down quarter from BOE, costs, third and the cash $XX.XX G&A, exclude cash

lease or $X.XX operating quarter. from quarter decrease expenses per for to and BOE, million per or $XX.X $X.XX due per fourth workover were quarter $X.XX to in million compared The million was prior $X.XX the May and and labor million quarter or Severance to BOE that on down $X.X quarter. totaled this signed production the reduced or the wells quarter X, was BOE million in BOE, contract or $XX.X up expenses legislation new commenced law Our $X.X $X.XX BOE, per XXXX other previous and X, July Oklahoma taxes that in from $X.X to per quarter. totaled between BOE X% in into In the gathering and the tax $X.X $X.XX rate quarter third expenses. transportation to million XXXX, July production workover XXXX. compared gross X% increased or per Fourth over

primarily we optimization savings Nearly activity $X.X the and to any five adjusted expenditures was in X% Lime, level, XXXX, due law the current effective with initiated we items, was decrease capitalization wells the per to where expense or $X quarter G&A XXXX Additionally, December November Miss a properties wells Average quarter measure certain G&A spud million. and approximately $X.X in In annualized the our half to online. before rate respect $X the were BOE development excludes that or new in expenditures of of in With cost is per Oklahoma the capital production. million. resulted brought with that higher in legislation G&A, we quarter. to costs. capital G&A in million lower align to expense better non-cash the quarter oil completion were million cash Operational $X.X $XX.X tax which to of third for $X.XX year. came fourth gas workforce to in BOE, cash and million $X.XX approximately XXXX to over signed reduction employee that all July X% to quarter into compensation The nine program million non-reoccurring compared second invested well XXXX, due at completed fourth per trended increased adjusted and well,

As at million, the sheet, debt currently of our and $XXX to consisting evaluated and the million being continue the fourth technique million $XXX.X million in net to stood availability from million the at we of Onto and results production completion in evolve quarter are the balance our RBL Liquidity of mentioned, of $XX.X quarter of performance. end this we facility. program maximize $XX approximately cash approximately at cash on $XX.X David approximately $XX.X fourth individual well million. had end

by our to will in RBL our hand, with early approximately reduce we March interest David annualized $XX mentioned, a $X cash made paydown million expense million. on which facility As

with I'll to finish Basin producing strategic that this review. Finally, currently properties our in are up excludes note like guidance. would XXXX guidance our I that Anadarko

guidance have operational We $XXX and $XXX million at between our set million. CapEx

day. XX,XXX production BOE XX,XXX per expect be We to between and

per David $X are workover per per per transportation and I'll other per and turn expense $X.XX BOE; for $X.XX and call comments. and ranges; and we expense $X.XX taxes between BOE On $X.XX operating guidance, the following the providing between $X.XX BOE; lease and cash over and With $X.XX closing and between BOE. to BOE; $X..XX between the adjusted that, gathering G&A severance

David J. Sambrooks

Thanks Jason.

million create North producer, a with on $XX February Energy. substantial year, value basin, to clear both over shareholders. of $XXX by X up are formidable shareholder proposed combined you drive asset that in firmly base to combination SandRidge Midstates and at-market, Miss of of Park and significant significant up provide to flow our believe the us opening sure path Furthermore, The am asset, a merger We company the Petroleum would creates substantial optionality. value our cash I Lime proven SandRidge free back we As next substantial combining per generating all-stock unlocks synergies NW and STACK, efficiently aware, leading strong delivering a Energy years. Lime, Miss million five for exploiting the an

pro which owning shareholders of creates combined to expansion. analyst that multiple XX% equate investors, splits all highlights in receiving believe to gain $X forma attract Another scale the proposed that meaningful we the factors exchange shareholders additional important an own at-market remaining X.XXX meaningful will cap company, new each SandRidge factor with Midstates allow proposal, with shares To a liquidity. and approximately to us result the of share. These We with the market approximately ratio improve coverage, XX%. of our Midstates the is stock for an combination trading shareholders SandRidge potential billion, have SandRidge recap should existing of transaction. have these

me our and effective the employee efficient put an management, leading as from proposal As combined bases. far organization together skilled our has I'll and company two

Board debt, will Mid-Con our see fit of seek will strategic the next The million map net Directors. forecasted for combined transaction, of our flow we Finally, very two input cash together have composition company strong the generation on of free and you up respective from from the liquidity, to positions over how XX can for To shareholders years. well. the five the the rationale $XXX Page zero

from roughly the XX,XXX net core We hold Lime significant bases will play. would particularly acreage STACK acres approximately within XXX,XXX acres we in Miss NW our control overlap, where emerging net benefit asset and

return-focused could implementation Additionally, we'll potential strategy, market-focused prioritize North Park presentation. that We'll flow and forward. the acres the realize to current the the to outlined XXX,XXX We possess generation. to will have substantial going capital optimizing approach to gain plan allocation Midstates' be free control exploited of in significant synergies the approximately cash which us operational growth allow disciplined net of with basin in a goal efficiencies

the the return possible the potential the non-core discussions shareholders. on to about to capital of can add our discussion and consensual our wrap excited transaction, well multiple up get ongoing, asset are for further have hope monetization upside the to on the as proposed combination, held that definitive we To a we combined options acreage it conversations and is proposed are with resources SandRidge sales We agreement. of reinvestment to of as

the direction it strategic a enter proposed stronger commodity SandRidge, clean years. has positive to along the questions. I'll significant a with been The this As a any in it for operator transaction many Midstates for prices, on we that, clearly is outlook value. generation, balance free focused over that with cash should flow add is XXXX With turn best with sheet,

Operator

comes question Amer Tiwana of first the Your Instructions] line Cowen. [Operator from from

Amer Tiwana

well us will seems and significant pretty people amount brought your like seems base shareholder may really is a It your color SandRidge. well, the around what production to has concerns the base of timeline, with conversations and the What to a performing in And something back are indicated again, no, addition are bit timeline been? this standpoint, a overlap you a there if about guys you there on? executing the has to of to you to some SandRidge have terms between Is pretty a whether There timeline from in up? shareholder get some have it's or indication a or Can what transaction. talked of offered? is little they else that they be you of focus a give they will get yes want that have that that you back they with you

David J. Sambrooks

is we've discussions the start that with the the with the shareholder went of to public question. significant with Since this David. have announcement, I'll of Amer, kind combined we start base. had ability

individual any of characterize And I so really – would those can't conversations.

I generally would think positive. call them I

resonate for talked pretty is the of rationale with merger to many that the think to. clear the seem folks and I we've

have and line there. dialogs an have continue open We those to

In terms ongoing. to I SandRidge had say, any of very can't timeline, pretty It's and speak progress really we've I meetings, that. the with will details, those robust are other order. I conversations, and hope I to like short will had say that continue those discussions timeline date this, define difficult some think to on significant in a to we've something but very directly

Amer Tiwana

And Sure. that having are these who Just there amount place the in understand, have turnover seen really to given front, management on of is trying SandRidge. at that the the with, you the conversations a that we is isn't advisors, Board? management given

David J. Sambrooks

new of has a SandRidge direct been making really good haven't their CEO communication in think found in to clear the there. communication us job done with I've I and path. breakdown Interim mean any I conversations I

them. So, I think with conversations we are having effective direct

Amer Tiwana

thank Great, you.

Operator

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

David Beard

for another you general Obviously questions very in Amer's here. and just Can maybe the I'll in just both completion comment basin, costs were costs? rigs helpful, tack so about take maybe

David J. Sambrooks

higher than time, really any We tried escalation completion few We've were designs same by been new we mention and the some rig larger cost any did seen by there. really just included at cost, some in We haven't recently. prices done running Those the the of discussion basically yet. things we've more a on out base pressures for of out were not completions completions we've that but there. driven propagating cost kind creep the seen We've overall that choosing been really haven't there.

would a seen creep haven't in the right really of say, we I now. So, cost basin, lot

David Beard

comments All any on really right, we at you NW eight could thoughts similar early NPV too which helpful. is in don't is wells, And I STACK, to to NPV maximized or that down if related full-scale of know tell? maximum STACK, was have it had it Continental there the thoughts any a on here, development some expect that the but

David J. Sambrooks

really it's to Yes, early tell.

there. asset I watch our of activity current of think kind with to is view our base kind is

I programs the give think us a different on of I think more its about is right it's of but earliest development kind But 'absorbing productivity say. going in a is we those be. for information and what so around lot hard kind going the that are lot areas the now, going in to of a information' there us not activity to stages of kind are stage to optimum

David Beard

are this be And is up you approval That's any just point SandRidge? any Anadarko buybacks to precluded for lastly at would do Board for buyback, and with and that to possible you given possible then share doing as guys negotiating you it relates helpful. share sale to it have you relative from

David J. Sambrooks

a returning and to I'd capital have think the we generally, answer is shareholders. as going question that we of forward probably as priority I option look certainly – the just it's more

is are, And us. see we option develop move for what our what that's cash an forward, and always be our flow free so, and to as needs that's going consideration under

David Beard

All time. the right, helpful. that's for Thanks

Operator

closing [Operator questions remarks? phone Instructions] any at the And have you speakers, no And from have further do we time. lines this

Jason McGlynn

contact is very this the of all great us investor We a be support the for appreciate the Again, Web-site, the very any day. Thank much calls on Yes. on deck. Have day. you follow-up all there rest you available for The release, or we'll our for information press thank the and joining the morning. much. call

David J. Sambrooks

Thank you.

Operator

This conference conclude does today's call.

You disconnect. may now

Amplify Energy (AMPY) 14 Mar 182017 Q4 Earnings call transcript