BRY - Earnings call transcript Q2 2020

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Operator

Ladies and gentlemen, thank you for standing by and welcome to the Berry Corporation Second Quarter 2020 Earnings Conference Call. At this time, all participants’ lines are in a listen-only mode. After the speaker’s presentation, there will be a question-and-answer session. [Operator Instructions] I would now like to hand the conference over to your speaker, Mr. Todd Crabtree, Investor Relations. you. Thank sir. ahead, go Please

Todd Crabtree

XXXX and Executive you, Financial Trem caused Brandy for Officer times you earnings this Thank aspects other morning financial addressing release to are Yesterday President; continued this details and and Vice Gary response Trem issues to Gary Chief Operating and Board COVID-XX. Grove, and company’s operational Berry’s the joining the us Addressing Chair unprecedented welcome the Vice Cary and Baetz, the further highlighting earnings for an quarter operating year. Berry everyone quarter on to and Officer President. for CEO; how plans results afternoon, our Chief of and our Smith, of uncertainties morning. and issued Thank financial business. the be these second by Berry’s Executive teleconference. and then will we second and remainder share continued Cary will discuss response will these

Before make a turning few Trem will questions, remarks. concluding over to it

subject the begin, to call projections and discussion other the filings of meaning certain to I These to within language risks federal earnings include statements harbor Earnings the your our forward-looking and want These today’s differ statements risks contain or in in are attention laws. securities may release in and we release. found results that with statements. these Before to our factors materially safe and expressed cause actual uncertainties implied from those SEC. other outlined

most analysis the Any that earnings including contained recent a presentation this in and link to the presentation. date forward-looking Our reflect call earnings information, on the and has our of website, our are release made. as bry.com, statements, release made investor

as law. the call measures between and measures. earnings required related for We plans refer except during our the tables update today’s our and on mentioned reconciliation all or duty Please adjusted release in to by have website them, no to a GAAP

also will will post of the to this website. the link turn I call call now replay over and our Smith. We the transcript on Trem

Trem Smith

and Hello, business joining Berry’s Thank many I everyone. our safe challenging earnings choppy second The to several due strong Berry a environment Todd. to has remained depressed a months. to team you, dedication come hope this you today of everyone growth in Berry tirelessly waters, will and everyone’s these all and call. for last creation. worked First principle, healthy navigate us cycle to XXXX quarter be value at others. the and we commitment industry over out has for for Thank continues XXXX for position the and

continuing I understand hand flexibility mentioned cash by the call, intact, free planned sound I levered a on generate our and cash record, on down flow our position might cash end is into broken within will giving with I remain substantial reductions like living for cycle on and liquidity year creating XXXX. us cost flow. a process and but and have improvements, strong value and we And through As we long-term sustainable last X-year free laser-focused to Berry

found but one and prepared the I Berry cash costs OpEx was quarter-over-quarter. history. position. The opportunities performed speak very our success in improvements our organization release reduced our unhedged now, This results due earnings team challenging process efficiencies quarters we XX% reduce XX-Q. and the through by to industry second details well. of the additional to a that cash identified improve effort. an extraordinary our increase savings in was can numerous and economy the As to we We and anticipated, for quarter was highlights few the show and most will be

of term. within projects Importantly, Gary specific the over in long sustainable projects provide give the they examples should are benefit moment. a will control, our these and because Cary

it we Brent. major Further, at our a financial to positive However, note to hedge position. improve impact important these to our in hedges additional cumulatively, continue $XX XXXX resulted that all position, projects is and added

about $XX, details around. hedged at which for now XXXX provide oil more will about We in Cary two-thirds are

bolt-on Additionally, Midway this quarter, located trend development opportunity well formation prolific we Potter on our in closed a XXX-acre horizontal North with Sunset.

confident are opportunities. to this We will lead development acquisition even more

of We as will arise. proactive taking attractive be in to continue opportunities they advantage acquisition

XX% California remainder is forward XXXX Looking concentrate to Fuel usage the through the we and as XXXX. and at XXXX. market XX% early rig up improving XX%. well one efforts XXXX up on gives its This runs strip. least confidence The refinery is us through low October continuing April, the from of run drilling from in up now, starting our Brent continue approximately improving are April about and is and in around strip in to

The was prior quarter noted our we $XX can words, production for the in In other our As can decline in levels investor flat. meetings, barrel. as and $XX to we second calls decline maintain production annual expected. per replace

and curve annual historic decline a flat keep nicely Our set and successful capital needed for low beyond. XXXX up to us production load

adapting to no and We to regulations accustomed new quickly different. are is requirements. COVID-XX

at procedures. they we we operations in and to place health our These the successfully. pivot measures our working As past call, and are safety were of quickly, including locations, requirements protocols, recommended CDC-aligned all few mask-wearing able and for have last implementing months reported the sanitizing been

continue needed. businesses, tools keeping local that implemented critically important businesses gas production while is also We and our know operations gas and safe we each business allowed states - for when and distanced working of of that state. essential and oil for employees us remote fundamental where economic such. to recovery Utah, governors to the Colorado California operate oil declared our have as all we This seamlessly, operate. to is operate The the and We assets and as

care the which continue Berry work. our laid any current this in able addition, take of are to has and be or furloughed downturn to In we support at time, due not to we economic the employees off people and proud to communities

made is gasoline more largest should in G&A, the which States consumer advances of crude United previously than in in non-employee half reducing the have, itself third stated, the significant year, We neutrality the and is of California’s XX% as came between more day XXX,XXX every day. the oil came state’s California consumes by and priorities. world even of evidence into all reality it XXXX. sea as the or OPEC of support well imported profoundly second about half as from per California approximately social the Last and Berry to of bridge imports barrels OPEC+ helping on nations, carbon goals tankers. gap committed California energy to all

as that provider. our our advancing is governance operations safe California’s dedicated critical includes become social to are managing maintaining energy and we We remain Therefore, working it as to affordable environmental, and friendly This leading environmentally well initiatives. emissions relationships goals achieving dependence regulatory in COX everywhere to policymakers operates, reduce California its and we on to have collaborative support reduce especially We California. with to its energy Berry OPEC. a in agencies and understand responsibility

solutions; This our providing have production and to us jobs state gas sources To efforts, energy from sensitive as are continue achieve working affordable a ever-improving ESG and and this. California in the and help with producing includes taking diversified lead energy including: preventative offering and us manner. we with created environmentally oil years XX orphan Jason achieve reuse this a We efforts in to approach local and safe to renewables, high-paying the growing resources COX holistic such oil water; a position: and remediation technology of emissions; spills. and joined will July, of Director of Partnerships beneficial conservation, throughout experience and wells early technology, of these idle new Strategic and and including Marshall, elimination California; addressing of in expanding reducing Alliances. use the for

distract to shy from the We are letting will our state a known obligations from not citizen, us we good and stakeholders. this all being and defer our not downturn or away of corporate

XXXX keep On will let achieving have and plans. regulatory from permitting the not we front, issues not us COVID-XX our and

process We on streamline expand throughput permitting and to XXXX continue our our to plugging review plan. abandonment permitting requirements in-house work additional and toward CalGEM’s to

meet business including value want reiterate always all cycle, in to the one. to do. is the designed create our we as obligations this We Berry any model state, I to that will

Our in well. one and experienced this several weathered as leadership downturns past, navigating the through we are has

already As turn return, over are we I now it which we will. it exemplified will have market the positioned for Gary. by the to to strategic implemented, well initiatives

Gary Grove

and thanks for joining Thank to you, everyone today. Trem us

operational like to and in Full The returned COVID-XX a conditions. touch second Berry was to but and I quarter our creating be was found release decisively meet on challenging challenge, that due eco-political of few with and would briefly our the both a market value acute with focus in details cost low. on in swing while a can move results. solid XX-Q, to cycle pricing quarter quickly and earnings a To able

impact April will to steam X% quarter-over-quarter down activity Our sales our of some from sales our current of early speak a total were the drilling I which in ending volumes – as result and shortly. reduction,

of of drilled currently Additionally, were and expected annual year, X XXXX line XX abandonment, was not in activity the due the with wells BOE our expense operating will ensure wells current our to including either focus which entire expense, and operating steam or BOE our down our the operations managing period. safe production are during be the plans the any injectors, was capital X% expense Based delineation cash expect structure, previous in our drilling have our These we per to Total on to down impact. for quarter remainder volumes. XXXX compliant. and results we while quarter-to-quarter, operating continued per on un-hedged same are operating cost volumes XX%

These efficiencies. personnel vendor or down and XX%. January have XX%, areas been Even well XX% surface ways. those but reductions June. servicing our down was As highlight from few that respectively and mentioned, more a To usage opportunities Well we maintenance XX% cost down Trem were telling not efficiency in and and servicing quarter-over-quarter. salary is are down was XX%, was XX% X examples, rate chemical repair manageable sustainable cuts, to reducing like and rather,

impacting our an also MMBTu. conditions, total during production. gas average the burn our MMBtu volume during volumes Furthermore, day reduction we management and We per burned $X.XX un-hedged price our of XX% cost been quarter reducing associated our actively steam effective quarter the reservoir calibrating with We per XX,XXX without through quarter-over-quarter. at second rate decreased have steam

production short reduce increase, disposal As which in can impact negative we the term. our have water steam, a requirements

value savings cost production with on balance always. to continue incremental impacts as potential concentrating creation We

quarter to currently Moving finish start into drill – the $XX.X infrastructure certain are up note, wells did to capital, rig sandstone capital we when quarter. million that for program. going to necessary going XX are in we that XXXX. drilling October and our on early stopped drilling plan the projects again, in we And as one was We to for we restart

drilling permits our sandstone And with hand, as begin continued have XXXX today, We program the all have all XXX for in finish on projects. we permitting other program. permitting roughly as of XXXX we wells, and our process

to or have also an either send at XXX approximately additional waiting CalGEM CalGEM. We permits, to

While we management plan our capital obligations abandonment environmental, leader activities and remain drilling not and as initiatives. our idle program, under mandated the well have reduced or we social fully California paused ARO reduced to our and a in committed we and role our governance

We end. have year by targeting our to-date plan, completed XXX wells annual in XX approximately abandoned to be

During continue study Berry high-pressure data call, Since the injection. we and practices concentrate that and been had to the with The study and lab in their concerning X have mentioned we on cyclic best engaged call, with CalGEM progressing, operations update steam our supply information excuse requested. – CalGEM Lawrence is meetings as Livermore lab. participated me, proactively our safe with and last last Trem and

a We this oversupply months across hot normal to several topic supply industry due been levels, year. study Since has over levels the last returned the the have then, at situation more no will storage Storage time. longer is this later expecting are in spring. the still a and to conclude the the concern

marketing However, have that amount next opportunistically and certain of we to a in of storage through us we we group. will available our year procured June it have do use

turn that, with our we and do costs on everything will will to forward, over now analyzing value we Cary. to it creation our lens. continue through I production, And focus Looking

Cary Baetz

Gary. Thanks,

Gary, both continuing for Trem crude are and cyclical X-year we plan highlighted a low price by environment. As to

it higher year. and to we second the Our levered be first quarter, cash achieved flow flow we continue focus the into the centered remainder as was it free continue on even We our to quarter, the the to second positive again in position quarter improving expect than and free cash head XXXX. improve will of

expect portfolio levered We are and be on the performance, currently a operating $XX cash XXXX cash $XXX hedged of to million already with we free seeing current nothing and outstanding about balance current RBL. of our buildup cash Based on flow million. nearly

barrel of adding in than barrel. first of have We half flows day to cost, hedge to our positions, second day hedge oil with XXXX in at hedged quarter slightly XXXX our combination back The XXXX hedged of rig a all and at of lower We at just currently a our more more year our to visibility of X XX,XXX least about XXXX position. per improving per confidence $XX barrels prices this XX,XXX the increases under and continued barrels have the and of $XX provides last commodity than half cash into work us and the XXXX. put slightly

have are process. Gary implemented and more highlighted, in have and savings there Trem we As initiatives, cost-cutting efficiency and

these in Some trying of help are to times. cash conserve short-term concepts these designed us

term. items of long many However, are the over sustainable these

short-term regular per the This quarter. nearly million of saves cash was us dividend. saving initiative suspend to quarterly temporarily our cash of $XX One

However, financial economy returning value to the and allows. as position to committed shareholders we are our

reinstituting million than One expect temporary the taxes a I reconsider market financial decrease on and of clarity item color going remain we a reach on year, cost We sustainable we historical to and our quarter nearly them $X prices greenhouse like gas we Brent will historical levels, will historically GHG due would line are when barrel. when $XX of second to largest cost, stabilized In these the have is prospects dividend We returned the more of give our this part the in prices range taxes in income costs other and this market first to dislocation. long-term which our forward. more that saw allowance item. explore quarter to oil in

take any we of market like will quarter. did further we the However, first in improve cost disruption to position GHG advantage our

of elected after to Facility today. use million. RBL working June, we million. late no capital borrowings our $XXX manage to have in commitment reduction line on an savings the announced $X bank we RBL equates We semiannual to primarily reduced This re-determination, As completing our annual and fluctuations the outstanding

tougher the Our plans of is given in RBL banks are position anticipate The and their the currently capacity exposure. we larger that getting we as RBL building. use XXXX reduce cash will more the flee through sector not process the banks

the liquidity will We the opportunity return to Berry and our group has with banking banks meet partner continue to adequate to their ensure had requirements.

in within have capital flow companies lived cash our and primarily most this levered than different RBL we use are Facility free manage We space our as always to working fluctuations.

use and XXXX. dividends margin public to the we for oil million cash produce masking small-cap a Number in This and capital oil as because I to than are per four, of XX% and July maintain annually. our typical free thesis large oil is On back wanted the return in note oil cost. have of a our our majority Brent-based, play production dividends. live and to compared we we over share which in I higher being resource interest, and BOE is revenue about cash is gas with we steam energy different, shareholders, of levered and are decline required $XXX includes Number of Trem, and flat our we out investment are equivalent primarily resource rates, top-tier going producer our Number production our higher the to gas it cash we since to the do cost to three, oil weighted corporate oil our have oil, any Because we typical the Number flow conventional – oil points. form producer. the production, in low hand Berry producer. a barrel oil from XX% XX% of reiterate repurchases before is don’t five to one, two,

a we We gives are drilling will very reinstate play. can resource not up value we market a scale a us market and dividend for when paying terms, and five, the and In oil quickly. supports Number completion plain capital-intensive one. company aren’t down

we only resource San the oil. we play. fit. producing producing the the since be for have that oil will to oil in But us thing same produce Joaquin as the is box X,XXXs don’t just with reality, Berry’s properties been come. and investors many fact, share wrongly Basin in put we Many a early them In in years we

At this We that Not value. are team manage for not and always company different but this is EBITDA, Berry, management good. will volume, value.

We will times. and at continue cost during to operate safely lowest efficiently, the challenging possible these

best within free are remarks. to prudently, lowering is Berry continued This now While like in for levered working we success. our our the bolt-ons, position the living don’t And we Trem it turn improve, to opportunistic means cash back for I will advantage over market that know costs taking hedging and will of when acquisitions flow. ensure final

Trem Smith

second no We a per year finished with the There of quarter now to committed Thanks, at Brent $XX and has started XXXX remained nearly began unprecedented. Brent the all than to this Cary quarter And better We Berry Gary. With the returned of its has is volatility, XXs. XXs. to low Brent price this and word in first describe barrel. with low promises. the

by an cutting their ESG state to reach shareholders. goals, living financial to our costs, create value with policy, the continue our for and improving to are We our partnering in effort all energy program

the we of start the eventual market. for fourth a noted, quarter. as return the And planning rig plan are We to in drilling

activities in and in the anticipate for proactive also as We will a see opportunities. downturn lot consolidation the be opportunity we industry, continues. will that Berry, of these restructuring creates pursuing including and changes This we

now, in be where growth. we value flow the an integral producer positioned on we part we First our of producers our We in especially will cash when recovers. and are of focus for a market With a California. position of in and better oil, solution are the proven, operate, safe, for Oil friendly approach, environmentally than more our states ever, but energy all is the than many fellow Berry

risky California long, human terrible rights been records. too far has oil For on energy from with reliant foreign-sourced

a dependence the providing on oil companies nothing and positive OPEC. way. by resource Managing with safe people other together, Berry. healthy the cash California’s working thesis, Like are new We reduce a we energy we providers, different about jobs renewable is in flow with for from working to of Cary investment are California. high-paying environment And noted our can very

ensure know by also value eventual have and this company to search successor that decided challenges open creation, historically An first Berry gratitude during leadership. Grove will Gary’s for flexible will demonstrated would been and company you is to up He As unprecedented we year. NASDAQ. helping in We like now a in ensuring underway, and our questions. finding I we numerous And has past capitalize his circumstances owe the manage emerge retiring from has able pivot engaged the been for in now a instrumental traded his Thank executive have positioned amount will exemplified and I has Gary this driven nimble becoming by immense to value on to is faced. we for Gary be just lastly, organization creation creating his you, and Gary, always, that is publicly market was improvements. and active organization, bankruptcy on smooth transition. everything. he for it to a of the And dedication quarter quarter, on as end involvement strongly and the the let of of Gary next an critical it shareholders

Operator

first Instructions] from Leo Your comes Thank you. of KeyBanc. Mariani question [Operator

Leo Mariani

Hey, to on the guys. of capital here. touch guidance guidance. know million had $XX wanted the guys you I I base just

kind of us to here you that’s hoping bit help then fourth regulation with that, I production. was directionality quarter. the also, still the on in with verify And the a intact little Just wanted could

fourth activity, given starts about maybe that stabilize comes in that kind lack Just third all am a down quarter the right? it a of Is the little of more in the I little bit assuming and to bit quarter.

Cary Baetz

the then start as are on you missed. fill will then seeing in But where the quarter real jump Cary. see Gary flattening and the one quick, and rig will in Leo, be this that we continue on third any out is the drop it holes quarter. right, the will comes will fourth we I I

as far approximately the still As million guidance, range. now, right $XX in we are

in the up with move into start we call. we But on down quarter the scale know, and if the If ability the to on choose. that color right in work quickly. the to can at we about, plan you starting will now, we so do give if into we more arise capital very everything, have we plan is decide have you side, do talked place. the we put as quicker But opportunities As – facility and that XXXX that third scale we

Leo Mariani

I Okay. guess here. to rig activity with got just restart That’s respect place. the the you And helpful. one Obviously, in

the have potential you to least hedges ‘XX, You good place. XXXX. guys in early in have on it’s did talk know little I got at one about but bit a rig some

So have you base certainly of cash flow. got a solid

just prices keeps at in if that Just cash up that the wanted oil at more levered levered living flow activity is guys comes ‘XX, will least way keep next you rig going here? free oil free year governor up make that sort sure To to of to in extent flow. is reasonable the going another and that it get within expect we rises it look the that cash of is on kind

Cary Baetz

and I take put things Yes, give more again, cash as were so the to advantage production this in cash, you models, The time. flat will XXXX. to But our you XXXX But And we rig are for I at And capital. to at was where about work we cash right, your do of will the the around keeping work to looking least to in cash that improved we that. thinking originally go improves, versus in X-year of have to I focus can the we intent we this hedges we put have answered Leo, of if reason one into – field mean, is point now, planning In we thinking are flexibility could flow in year-over-year need to start lock flow horizon, returning year capital we will right have more be – hedges on want to XXXX. at us answer year again. do in work. then or the place start a right? improve – be the will build-up that least about the over Cary, opportunities for the

problem model’s to are if right to but nice flex improve. the market So have, you prices exactly describing up on ability

Leo Mariani

potentially And is recently might just next plan to Wanted there’s company a Maybe the color there front, bankruptcy. get lastly asset maybe there helpful. Is you this attractive some look just not that’s the there on that it’s can this filed in just at term? on well see assets for as million, acquisition to that a undeveloped? attack big obviously, your at Well, to provide wanted of then recent sense, deal near in a there more kind $X neighborhood some if little just year? bit completely know I is but a this you deal?

Trem Smith

Leo, start Gary to this I did. because am bolt-on and he in, excited we is about is and I then this, let fill will that Trem, going this super

field I acres deal. and is want given it which First about say of words is in going am our XXX ago, a Midway the I trend – disagree a a we year we in drill over best with to your bolt-on. choice use Sunset, a big you, Prolific, volume to actually all, don’t of the is oil, extension a like Potter but of this an of horizontal discovered is what wells. part big And it

in So it’s are to have trend. our we – excited very this position consolidated

good us. is that a So for one

and And bankruptcy want talk I did So will then issue. you the add? come Gary, about back to

Gary Grove

Yes.

do that an allows So Trem horizontally trend, just the And to us drilling like as north of direction. It right continue sits property in we set. mentioned. existing it

timing have like – and so – program. we It it vertical around successful back similar previously any with again, - locations on coming wells, the it’s have undeveloped. it’s does with been again, horizontal developed had it’s as areas production far As was not it, goes, into it. not where we and been But redeveloping currently

drill We us that’s look to our potentially to wells guide So expectation. horizontals. delineation would help our some

earlier what a to always, we mentioned and our honestly, the again, As that. go south and to going ahead do that would ourselves we is start and in delineate drilling, Cary work caveat then we everything is But where pricing to way and in XXXX, modeling project out north that that about would taking ultimately, as direction.

that’s hopefully, So helpful.

Leo Mariani

helpful. Very

Trem Smith

on industry you, looking – grow, like to must And to for just will the always disruptions that activity create in things any shareholders. due doing at but area are in restructuring. opportunities we remind I value Berry’s

So it’s an Leo. respect, ongoing conversation in that

Leo Mariani

Okay. Thanks gentlemen.

Operator

Your from Meade Charles line of of the next question comes Rice. Johnson

Trem Smith

Charles. Good morning,

Charles Meade

October target you of going going is just you that that going into on that one color sort to sort And is is but – and touched that some one kind that? you be this of have, Good in to your and or or over bringing that in Can be area back whether wondering sure you to targets some focused I know after? going you if whole is of Yes. I I any going or that not. of this which am be remarks, are targets prepared team. inventory of through talk rig the could kind morning you it’s just one Just question because to of Guys, the or ‘XX on your what not – targets on that bounce back around? of covered are – am to go really XQ I about your there in

Gary Grove

again. Sure, Charles. This is Gary,

will of the talked – at diatomite are vertical where study sandstone of they of all now they be and all the a Kern in or combination with will is horizontal And are we continuing. Joaquin we But side sandstones it they Bakersfield wells – County still the all wells. So a are be as west combination thermal right about San valley.

be Some be Midway down will as wells, opportunity the horizontal Midwest-Sunset. bluntly remainder down then will the the wells example. about, and will Monarch be the be the others will Tillery Belridge, will Formation up And Sunset. in in just vertical be in to I there an South similar Sands talked in Two, in

Charles Meade

ahead you, Got it. please thank go And ahead, That’s yes, go Trem. helpful, then Gary. –

Trem Smith

Trem. Charles, is this

Just because resource So we XXX they I of are thesis. in shallow low very to horizontal vertical terms total everyone investment the okay? the These nature complete, horizontal talk of the going drill about of okay? not when remind In and are Cary’s very want cost, depth what, call, that back to range wells, wells. and to play-type

that. everybody of is to aware Just sure want make

Charles Meade

for maybe Yes, added anywhere. The on course, $X you kick you of for us thoughts. and opportunity might added question, sort I of the bigger million, emerging best a the And it. Leo’s curious, zeroing am it – clarification. acres you into expect is already I ‘XX if half back of of bites wondered give should like would and for you of just small down that see line? ‘XX further kind through to this the could the bite, your can – have Is I in – we I or representative that for this appreciate this XXX this color thank but you Trem, you, be

Trem Smith

what in us And Berry going talk go we becoming operate and these what since can just there’s public. the hard, clearly very have various do expect that have of want kind some that position, would have to aside companies about I course okay? That’s the much of to of we you business to – through about position to years number therefore, normal. expect last Charles. California, the cycle. And done as market. they review – there. on opportunities, what want And to question, hope and we those can’t good we bigger a that particularly bolt-on future. disruption that just that, very given we and advantage to the thrive we to I will helps unique talked in etcetera. operate, Charles, we a going I it a through put chunks would of are It’s X they normal over all puts this in in of So I worked continue take but

Charles Meade

you your Trem. thoughts Thank helpful. sharing is for there, That

Cary Baetz

two too, Charles, to because this I I Cary. is have when just other talk – am talked. the just

also, I left we said, So permits of Trem I lot do as a highlight, and feel in have both out. just hand. want to But Gary

scale very also And that crazy and be to – something in put pricing just if does market everybody the where the the make ability fourth flexibility do sure want up did quarter rig to so quicker that on allows And sandstones. became the it better. if I – much as understood even market it what to to give well. the we us us nimble gives

Charles Meade

Cary. you, Thank

are something that. for guys. lot Thanks like We a hoping crazy

Cary Baetz

Thanks.

Operator

of Your Simmons Greg comes Tuttle of from next question line the Energy.

Greg Tuttle

decline X% your the that X%? Hey, going thank for forward? to to And remarks, all. overall we about I about as XX% curious that there the or we Good morning need talked and quick am you about answers mine Like we what shut-ins think that you too, maybe higher quarter-over-quarter. drove think a can saw of decline in – to XX%. prepared just questions. A taking corporate an any Were

Gary Grove

Greg, this is Gary. Yes,

Let me talk real that about quick.

three two go things into So, or that.

XX% about IP mentioned an things And decline, that difficult not That just because having basis well That’s it as company on is PDP of quarter-to-quarter ever and producer, very to decline, a in a corporation. before as place things we still being highest annual are today. XX%. look us Again, low about the a produce, has to move. just can swing, let’s sometimes example. at of I can it’s thermal as first, an our the – They the – talk talk that will as nothing a and that that’s overall is changed. declines that So where have not example,

that a sorry depending a think oh, single-well understand, on in you producers, application. produce comfortable with particular thermal it’s So well, but this drill I sometimes hoping when model when of for I we a declines cycle the you I you rate bit case information of, the am a or detail of it’s them here, think in or more feel more you give necessarily am isn’t time-related. less, quarter in it that. Even you to a can peak That little as little this. can they if and the off

we some first first online some had quarter. that had So we as quarter, be that the rate allowed did carryover work in actually bit we a the higher little that in to came XXXX that in

up first the slightly was the that into quarter continue this and that first the of work not through quarter some year, from of And work. So, did of end quarter second I as mentioned.

have a you the a if of lot. during We some little annual effect we a that due certain online the from in we will, XX% quarter. the of not steam So impact bring impact little quarter bit from not quarter, kind bit in to went to PDP of that of shutting one. did And That’s decline. back overrides, have wells that pricing did in did bit second if little XX% the then has a they down that

as add is those continue a those come expect has no, We the future that, always. annual economic It’s changed. look you decline sets and that at in judgments well not on basis of So both we just environment, make it Does the tell property higher. value? to in current up on, not our well-by-well corporate to I will the like individual

You that rate. not Is is cycle at annual indicative a helpful? are an one-quarter that looking of

Greg Tuttle

for then guys absolutely. the so am you Okay, you any – may shifting then like as color And to the guess, on capital a for have working you And curious Thank that I how Yes, drag? cash mitigating balance? XXXX, efforts I much perfect. about think year-end gears. be do guys to that.

Cary Baetz

– balance I Yes. Greg, cash is I get will so fairly make easy. sure

we kind have based it I million as end It’s So it of and higher year but their will than dividend. will will out, no be everybody let be, $XX kind pointed as significantly of to especially that $XX our today planned, CapEx upon out. of at and model million map growing. out, easy

working benefit wildly that payable – working from see we massive our rig [Technical But as or working time. of in to as having get to capital far started things have we overall, work actually back month-to-month As capital work. even we don’t just the from side capital, some Difficulty] vary quarter-to-quarter a we will don’t should not

Greg Tuttle

very appreciate you perfect. it. Okay, Thank guys I much.

Gary Grove

Thank you.

Operator

of next Seaport Global. Pope Nicholas comes of line from the Your question

Nicholas Pope

guys. morning, Good

Gary Grove

morning. Good

Nicholas Pope

that that various back I from work-overs of the to question. for from the versus follow-on $XX I was is, It’s with the and much – during XQ, guess, what understand OpEx, production just being decline to how as really quarter? cut periods seeing million just a saw turned drop, of you hoping the trying or that kind drop reduced sustainable and the co-gen steam off

Gary Grove

is – bulk and we this So the obviously, that Gary. control Nick, of

to control back we of So in that. some that will steam want likely, lot most will because we tell control online, we The I a we at it. be point dramatically. and will itself, obviously, steam bring pretty you future, redirecting the

time. steam all happens our the So management

as So sit there’s we and chosen times of particular again, different is we when have a put in to due to steam we right conditions the do we today. the steam put back interval. but at in we What to interval have we it a now interval that the, reduce market out different took interval a it

back continue to we bring As that of will moves online. some forward, it, steam, that

that That’s far in visit us. foremost, and properties. jeopardy done way are As me sacrosanct all. let and other at that not categories, employees will operating be of those in – for first none our number have – – for compliance, we of get anything us as one, put our is who safely we – the the Regulatory for it’s we

we first any so that always won’t at will foremost. those We are us that operate cost and staying levels, cut associated with way, and

we Now the market, this in I COVID quite initiatives before called frankly, had place eco-political issue it. as is, thing and other the

levels to in the working even. And so costs before we that down were sustainable move

those So expect itself, to lot we like don’t a things. chemicals have I done up. of go back

look done on that are continue we we and personnel movement we use rig will time-in-motion that those servicing studies well the and have do as to of sustainable Some forward.

would will lot to number, have that bit stabilize more I Trem will But again, a conditions of us we around of them of expect us wells say hard XXX% that the the say have case. some the on done, in things a that mentioned. I range like opportunity I number, a online. the if forward, go bring market dollar up we back because, them and today. basis, little majority that So will per continue are BOE will real And in figure, where an But this can’t is

Trem Smith

regulations etcetera, sustainable. these But mandate comments Nick, to this am safely that, he costs. talk course. to has The Trem. going we add never are I about for will been did to deviate within unit is Gary’s of operate continuing the from and

at things, are downturn company as we opportunity We taking should look during to an do really a a okay. how

right. So Gary is

sustainable, significant sustainable. be And Because But right. it about absolutely piece things overall our on very in know, downturn I will that don’t we it continue a are do in will We it we steam. reduced a but learned steam have don’t our to Gary When helpful We on going grow and this – a unit unit, see XX%, we of stay is the and zone, have will a low, steam XX% okay? we know. reduction on cost is in okay? the to sustainable, have on unit basis, reservoirs costs basis, is are this

Nicholas Pope

about taxes gas that’s greenhouse I item should And on income swing you great. that Yes, other was a than XQ. from basis, And just expenses? unit numbers I your a on on be to the all basis guess line number, off revenue? I the about my of how percent the in because on thinking think of do

Gary Grove

distressed give we happened to quarter, we of mean kind just guidance first on and in I seller. is, BOE the a a it was of What per it – Usually, how give that’s at looked there as basis, a kind here.

but guidance in at time, point that advantage took that, of range. $X, historically, don’t around we now and we coming our I I this for that right so think off the was year think And Nick. are $X.XX

right range. as pricing well. the seeing there, I And now, think in been with that’s we are that it’s consistently out what

we that bump little in a So quarter. first the got

of kind are we back normal. Now to

Nicholas Pope

helpful. That’s Thanks. Alright.

Gary Grove

Thank you.

Operator

call back Instructions] [Operator additional Trem to over comments. would like turn to any now I closing or the for

Trem Smith

the Thank great you enjoyed today. next participating and forward a Have the day. conversation, all for quarter. Really look to

Operator

and day, a That great participating you now today’s conference. Have conclude does disconnect. may Thank call. in today’s you for

Berry (BRY) 8 Aug 202020 Q2 Earnings call transcript