HPK - Earnings call transcript Q4 2021

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Operator

Thank you for standing by, and welcome to the HighPeak Energy’s Fourth Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today’s call is being recorded. [Operator Instructions] I would now like to hand the call over to Steven Tholen, Chief Financial Officer. ahead. go Please

Steven Tholen

of morning, quarter Good Chairman welcome HighPeak Chief Vice to CEO, I’m Hightower; Thank Tholen, Steven conference everyone, call. fourth the President Hollis; Michael XXXX Hightower; Officer. are Development, Representing Energy’s Ryan Jack and you. Financial President, and Business HighPeak and today

on XXXX call make of our and XXXX plans, may XX-K, all we performance. During our future forward-looking to Investor release, today’s will statements call, Today’s Presentation, assumptions, goals, condition, the earnings March can HighPeak’s be make certain company’s found which and to expectations, participants results reference our website. fourth quarter relating operations, of Form financial

the from reasons, many regarding to please statements control. company’s risks of and fact to our a results variety are related which including the that differ may expectations cautionary So actual refer due materially information our beyond forward-looking in of filings, the SEC

also today’s non-GAAP refer financial We certain on measures to will call.

in earnings which So please the release, yesterday see was afternoon. reconciliations the issued

Our to prepared will call X the of now Chief turn will Presentation. over Slide March Investor our Chairman Officer, Jack I and Executive Hightower. begin our remarks on

Jack Hightower

Steven, everyone, call. today’s morning, welcome to and you, good and Thank

about the which fourth to and and great prices gas contributing world, crisis. is a company. had realize, oil some with with their probably to a this great terms exciting But of person As you of company of HighPeak time is in performance always in the I’m But excited the every quarter. macro CEO unfortunately, and of talk the more a annualized Ukraine performance. we

that end majority The our very our three fourth the We peak in production four completed be and throughout rigs program the year. of these of with anticipated an market. rig in We to most completed, which ramp-up We executed of are and the averaged year XX% of wells large XX,XXX contributing and now quarter. process will end are to added over averaged and third this of Our drilling average production wells again. be day, a and the towards the a of successfully are come active was increase average. with being number our the quarter had almost and reaching the rigs compared towards January, wells online running in rates our barrels

We continue strong. if commodity adding count our [Technical to Difficulty] consider prices rig remain to

our a so see you we we as adding numbers, to And growth our contemplating shareholders. in the go do our process gas of drilling are for we and And cash can additional activity. story, we’re to and advantage is oil to value outspend. through HighPeak market without increasing going could create our with so flow strength current take

So And to overview gives production barrels was everyone key liquids. company. XX% for I’d an consisting tremendously Slide economic previously the I our of to X statistics Presentation. you Investor XX,XXX like a this This March of point success. that our to contributes mentioned and our average day,

acreage I on and was position acreage on margins. position. leading $XX.XX top just flat quarter $X BOE year an million pricing. additional into savings day entered and three acquisitions, aggregate, we to of our sourcing quarter which water. the Also, acreage in rights a series X,XXX include per production, locations and in in – of first in of to water our the the closing increase a XX% acreage, first acres our the mean X,XXX local XXXX, a XX almost to day. about barrels also These our saltwater non-potable unhedged total XX% barrels approximately The of quarter XX,XXX and in our per basis, disposal disposal flat system, in We quarter acquisitions realize prices margin acquisitions contribute and XX% wells the to of with peer approximately fourth And to including cash operating continue equivalent, barrel oil cash realized a at to of a top fourth

If acreage are net our contiguous to in PDP XX area. development locations area, each million be including almost top increase infrastructure less other The integrate in acquisitions transaction, paid net had acres barrel. approximately many to prices we But words, times flat In looking were now projected additional value. for The on a $XX And because a operating today, to The been our of right adding of $XX you to we’ve high three a closing present locations million so value present to is that XX,XXX we it be our at that acres. easy we the the pick and The of to operated available prices $XX pricing our HighPeak, pricing, And into cash with than check $XX about that in value $XX a course, back XXXX, robust utilizing. immediately and, stay locations significantly multiple of and will actively boxes, they with flow to to infrastructure over year increase all XXX% to assets XX,XXX in are will hard is about current system. think year it addition add ago, they over little a place. XX increasing the and and $XX to to our have that to and upside will giving our HighPeak million well for inventory. XX% potential development related present already our they’re million than more in million, plan. gathering with but provide can the to synergies, XXXX add compared We value value. numbers and developing the commodity a EBITDAX assuming range scale $XX with it’s

have the Page peers basin. out highest still X, We only a oil I’m our Slide the If few to cut particular turn to this amongst you’ll in X, slide. going things or in pick

was XX% liquids. stream Our XX% oil, income

we on XX% percentage was the oil $XX.XX which basis, NYMEX was a high price because is And have during such realized the BOE a oil. average of this weighted of Our quarter. of price

Our to I our operable still is happening look $XX.XX, compared once write-downs third other progress. they’re $X.XX at Mike in lowered significant decreasing that expenses. great a of by barrel But substation having a the peers operationally things and about continue But third quarter. hedges. our what’s lease our things future. in And to hedge what’s happening the because become are going going active LOE with the in that are talk price compared the a We of price their to lot to quarter was operating

$XX.X unhedged that is of a of be plans are at about future and sense low that But you which a increase. was in what our and our future how future on million, our an drilling excited we $XX. very about future XXX% EBITDAX EBITDAX. what’s would happening gives today basis, Our Think and it was price oil the

If you’ll turn capital will to record Slide always into delivering track future. X, the of efficient continue our growth

all year look the on XX,XXX up a our to to this way X,XXX this a day, the barrels take averaging around low at four XX,XXX That’s barrels, XXXX for guidance almost growth. barrels to You barrels end fifth barrels. going XX,XXX the all with from then – XX,XXX drilling of and and the rigs way up tremendous

performance us about as of to and based we’ll But if in well about, function $XX think billion drilling year performance this $X.XXX was roughly production, our between at a of at EBITDAX If billion XXXX. to exiting a on oil terms at price and $XXX in single to million up you oil billion $XXX million talk reserves. in payout you and look $XX increasing that $XXX $X.XX the million takes $XXX to at average of a around for barrel, XXXX higher $X.XX a

is what proved to for you continuing mentioned growth. reserves HighPeak are mention that in see presentation, prices terms a oil so times many you to in I’m company. gas cash X, doing if flow. to can provide rapid Slide today’s and going I’ve turn times And growth we and developed many And of now are HighPeak

period, to our deck this to do to proved at $XXX higher look billion in of developed going $XXX of you year from and did $XX million year-end. reserves to million than price over added proved exiting counting to not it $X.X our barrel, at from expensive process million I what to proved another numbers reserves up $XX up If oil going and $XXX $XXX today XXXX than of million a low reserves $X.XXX month or below, what end at And this minute, a after just basically of we very are is that this what the prices actually And some to so in completed the the right to barrel XX-month a us cheaper, barrel growth at our end that at higher almost important be we than just It’s year. at takes us will $XX a at today’s this more of look being at deck. billion that’s that’s and rapid much and then prices up a growth in a price you counting going projected, into and XXXX. mean, look

a on are we So growth. rapid

We’re very excited about what’s taking place.

and can want to to about to who And and imagination this the deck talk going operations. Mike, that, give use an over And what on success. going with you to as own having presentation you your next use, you I’ll are drill slides few as year. see XXX turn to We’re wells the price tremendous we over update is

Michael Hollis

HighPeak Thanks, with perseverance, reliable the all and Jack. sheer embedded not inspiring. every that DNA. with our clean, our thing, be like I’d and hearts, absolutely determination Ukrainian. prayers minds to each are part strength and in that’s just saying and by cheap do our Their have to are energy. world start and do not to asked to the We provide do right should will

here he quality have fortress reduce lean can will for that to we acreage energy. position, heart more, I’m are are do nation’s us foreign HighPeak very and employees during our need that to time. balance heavy a in doing can’t our to blessed allow With a the the proud and what that rock sheet We this

X average Slide The consistent to average. flat yellow red curve our compare. to The shows wells Well curve turning top shows been date. performance results Basin Basin well benchmarking. Now peer X. Slide our how Midland has how Midland illustrates our dotted

to shallower Our months. in leads outperformance later decline wells

our portfolio. Signal Signal capital dotted and results wells, just shows average. in strong low anyone’s Our peer-leading strongly although ours, Peak vintage The The call include not and in but many well performance blue very compete Peak, absolutely structure, in early economics line drive for efficiencies.

XX,XXX economics. Turning the now average details based economics. economics XXXX our to blended well on This we co-developing Since X. on well zones great laterals reserve average flat Top in report and in lower investment for a Slide a focusing type our these well view provides Wolfcamp way our single year-end is A we’re display single Flat formations. this foot top, opportunity. representative Slide single from to curves our Spraberry X of feel

They again, provide oil, get environment, payout values prices. inflationary very asked a present flat recycled today’s Our on At ratio a well wells chart. a economic them. commodity have real accounted have only achieve of is but blended course, $XX shown are are break-even extremely $XX as X.X, the lot phenomenal. low top about in tremendous They rates The We barrel, a pressures. and deliver still of again, net price and return average we for quickly in of and break-even. high of they

any XXXX. payout we XX% XXXX any our of wells a oil shown. per the shows time. effect The well of show resilient from carrying compared for price, in of timing the our budget what first not return $X.X fourth economics are CapEx roughly investment and a cost. payout from cost more will our is price in to quarter production also graph significantly achieved payout We affected and with at million what our and have recover of capital do rate well fantastic period At short reasonable sensitivities inflationary period in a the strong We’re old

oil realized Slide slide If hedged by year pricing cuts the unhedged on are you’ll high and margins our leading basis. turn peer driven now full a which on for both Again were the XXXX, great of margins. XX, XX XXXX to and Slide were low-cost,

our Our our growth, margins remember, further closest reduction closest peers. a than than hedged for basis. higher with our will But on distinguish continued were and an our positioned higher peer ourselves unhedged peer we approximately LOE initiatives, from on XX% margin which us basis XX%

grows per our and energizing For magnifying should example, full SWDs, be Horizontal extremely solar in and recycling, our so increased to electrification again, Ellenburger that G&A also lean production barrel margins. we are [ph] our well I we’ll very And continue our further farm. too field leads way. lean a as our note shop us,

Again, mode, operational about Slide we B test. we’re co-developing That’s foot If flat XX,XXX Wolfcamp in two you’ll foot block. and A wells, have manufacturing of top. Spraberry. XX, our in Wolfcamp the one-third come lateral update In Peak, lower full to new online Signal a at Eastern now they’re to XX,XXX turn

We the our also on a far well have XX,XXX east Wolfcamp acreage. foot D of

again, We’re encouraging following encouraged Wolfcamp and by recent look, but wells, of lower time, curve. Spraberry very early flowback extremely the our A our and tie early

also non-op Ds said, D entire are the In our non-operated process We gross we well two southern as that foot delineation the complementary recently of participating coming operated or wells, Wolfcamp the currently in block. side we’ll Wolfcamp block XX,XXX Wolfcamp as drilling wells in into D our insight well. three gross portion additional zone of position, have additional to across participated in of D the we’ve our in drilling western in acreage of the drilling four on as wells our quarters. With the full are Wolfcamp our of

If and fluid simulation our sustainability company-wide. In you’ll now XX% fourth ESG XX, quarter, recycled turn we the of highlights. Slide to

Jack the a barrels now access XX,XXX mentioned recent to As day water. of acquisitions we have non-potable through earlier,

multiple for So frack eliminating can for And generators flat of our addition and set with top with stimulation need freshwater year second a we for cost fully non recycling date, constructed we in now needs commissioning one is the XXX% a $X need fluid HighPeak The potable and to million associated local the fluid. supply emissions to the capital and quarter in stand save cost. crew in roughly reducing makeup, them. for substation

These the oil sand summer. third commenced from gas and and Our and solar efficient construction Deliveries farm reductions. our been. operational upgrade mine is completions and will is in this sand The completed has trucking quarter, missions. in Phase our is on assuring result schedule in or today one operations to be trucking process. local pipeline will emissions infrastructure commence reduced availability

have safety call proud also with to that we are Jack. incidences had now We zero I’ll turn of comments complete, my the And back fact the to over date. employee

Jack Hightower

Thanks, Mike.

XXXX this up you and gives an on If of our graph which $XXX to been We average. higher has The interesting, We capital mentioned guidance, range XX for shows as is look year and very the show growth. at I you of average million. our you. revised of year, Slide that a right, production in to on compared increased terms our overview production midpoint is that the XXXX our XXX% guidance budget to this our

Our XXXX in than did XXX% what the exit is we production rate higher midpoint at XXXX.

a emphasize growth get that basically have out are signifies sheet. mind our XXXX. that of that we in unparalleled And to we Keeping So, organic not I’ll re going pristine skis. balance into

this where year. Our overspend growth completely today. the we And oil go are is forward almost profile with been gas absorbed continue and on as will into prices

and next $XXX year-end, year-end. those to that shows million side and off your still our shows the at paid senior turn unsecured And financial $XXX dollars notes. page We and to subsequent position it it our you full, If our we we our of financial and closed overview, position our RBL. on million cash have took RBL undrawn between liquidity liquidity we in

can know significantly. – increase at in expect period. April, our redetermination we We a already we that have We RBL

for reserves. outlined net to our to a And to little maintain to that. going debt problems debt. you relative how leverage you that at our right-hand net have than EBITDAX coverage I’ll haven’t box if we you that the But our to and just going necessary debt for We our one-time gives fourth And it PDP to we’re liquidity And to or exactly that, the an corner, have coverage on of leverage. and times you simply low what and of relative We to just is value EBITDAX. what overview the capital. quarter X.X see, can access relative proved to a any debt going specifically just always our with lower look to we we’re compared annualized financial total we’re of tremendous have having position experts, apply reemphasize debts. as not leverage at currently shows And, less maintained

as effectively, maintaining able we’ve – production we’re go our debt low position mentioned. turn that responsible a as while responsibly forward. you’ll continues do to been our very going So to this liquidity we continue very we’re our growth efficient And level. very responsible if increased We’ve Slide XX, to story, growth

And we’ve current all market and go forward things wide planning into being focus the operational pressures. eliminate by as as especially pressures materials of buying efficiency, of industry savings in many, to earlier, capital Mike continue we and for Our LOE going inflationary our inflationary many will these mentioned done out and light forward.

I’m balance our at recognized of higher industry. for economics sheet. of the expertise Ukrainian one without strong accomplish year, could banks prices and low-cost outspend. leads we accelerating drilling closing HighPeak. to performance, projections crisis, going underinvestment out the were to the uniquely advantage massive have the poised drive of with We is go HighPeak And to continue responsible ahead we margins saying and that which growth. today’s coming our mixes great prices, ourselves prices for products, and peer-leading realized increasing were that a structure We current take industry the in forged near-term forward excellent well our contemplate the oil our market contrary to and operational many a years. are this for sentiment, liquids and conditions, down. positioned activity the several Many to production past prior most emphasize attractive strength, in we energy and going in over will And product that to to

with today no maintain to reemphasize, close would outspend to a range. In I we this have where fact, they prices company. if we are want are growth they

And of with our shareholders the advantage quick that going we take to drilling high to opportunities. will wells, going making continue they to available – our that forward. can – our leaning have our Mike returns have going activity on increasing We’re as mentioned, into, rates sure of our we’re expect all payouts return, and

So now, open up and call we’ll questions. turn to the the call

Operator

the Partners. [Operator Instructions] from ROTH of comes question first of Capital John White Our line

Your line is open.

John White

morning, Good quarter. and impressive congratulations on very gentlemen, a

Jack Hightower

you. Thank

Steven Tholen

Thanks, John.

John White

breakout that on to some Peak, in you If the have and or you handy, you could, have ballpark wells completed numbers? I’d like fourth quarter flat if Signal get top

Michael Hollis

A this really had wells that January. John, we Yeah. is went fourth the kind online virtually were Mike Hollis. in the we’ve Again, into basically, we up – our ramp-up, began rigs the fourth in the fourth to up picked quarter when three is that from six completed, third quarter. going came and of one

brought drilled rigs So these again, large multi we pads. and well

quarter first So as release, in we’ve first got be turned wells we portion in our the will will most online, that be the in quarter. mentioned of XX which the latter press of

as saw on as presentation going that you that what we of Again, these the part wells part flat turning the the dramatically, wells the we we little that. and XQ fourth that a XX value that in that the blended of had, But drive QX, of of fourth our in bring to lines kind little third, of six top more top mentioned into second the drove center saw the as bit So came we’ve started as well into flat rate were a quarter the wells. you bit large battery late showed the again, of into see present perform net kind return. data on average really Again, earlier, well quarter in into quarter lumpiness you’ll of from of performance. XXXX of what the as the that early

again, very completed our wells all what’s about not and confident fourth for So feel again, the drilled that in very did we’re you of excited XXXX. quarter. guidance coming. We in were But see

– of of to all XXXX coming quarter latter first see the the those XXXX. on going You’re towards of half

little roughly very foot – lower if and Wolfcamp we quarter, back begin an we spend XXXX, wells eight. encouraged you And as the now forward think and out gives will general, So on then about a yes, for flat more Signal XXXX now winded, sense. XX Spraberry at and And A versus little again, we’ve again, the CapEx that We closer Signal fourth results. XX/XX that it’ll that’ll eight a next We’ve operations wells Peak will about be eight The barely A drill six completed but as do Signal a that a the coming six, finished Again, drilled wells the month, complete on of clarity. we them Peak frack in had split two But top. you of look that online XX,XXX or Again, wells. you good wells the we standpoint, our ratable those of you in go and hopefully as said, that coming each completed. in But pads, Peak, two six month. go-forward fracking into XX,XXX eight out long may basis. to to and wells, And give on for well. hopefully, we of are smooth continue week-and-a-half. with from have XXXX a month. in just per those the one-month, ratable two we’re a bit being foot versus XX. a have for

John White

to be Yeah, completed. that’s thanks detail. lot wells, Okay. for wells a of all the XX

about XXXX, Signal flat right? – plans for top drilling is are about that Peak, XX%, So, the XX%

Michael Hollis

That is correct. Yes.

John White

pass it along. Okay, I’ll I’ll

Michael Hollis

you. right. All Thank

Operator

Thank you.

question next Pope Research. of from Our comes Seaport Nicholas

Your is open. line

Nicholas Pope

guys. morning, Good

Jack Hightower

morning. Good

Michael Hollis

morning. Good

Nicholas Pope

little I talk you of could Signal a kind that was you as acreage. more delineate bit on Peak hoping the area

that wells going kind should at this think fairly should to it to and what guess on? a lot the what are was come – guess you perspective, the and what picture of about in to Hightower` how from I a overall, data wells? what development curious off point A from of from we Jack you But for see get I’m looking And of inventory? at the - offset four have of to at what’s now with East these XXXX. here set drilled be a shelf we’re them we’re and be four perspective West over start wells maybe with map wells. near-term participating what depositional we You going early to to missing And laid what that moving out is that wells, first operators, as stage the focus that, coming the that we’re going was this the means I Yeah, looking edge and the set in And Nick, East. more of from western of part wells we’re acreage big our off from data

to a And controlled perspective, thickness geological zone of know the well have is there. know so the we zone. that We the from enough

sure proxy, increasing with smaller that should the start. the companies we stabilizers, like delineate major performance from sure completing lot using, companies. have to apply friction a part make a permeability, in various because all don’t of that the properly that the wells the the that with come to to the and the lot going And making We want do. we we the of we clays, before are we we’re the of We’re reducers feel technology areas part, from to thickness reservoir, we to trying have of we’re eastern the make oil the with area way the western building sure

is in this to are the in we everything drilling Mike. moving area we while can about sure speak more Mike in slowly do and making see terms of the and now what each deliberate learn manner. performance, very we’re very, good. ahead, proper Go to specifically waiting we’re what So

Michael Hollis

idea Peak, XX, Nick that bet. is progress the Signal on what gives Page that today. you shown an we’ve in You map in Yeah, of

done So that’s throughout a delineation. mentioned, doing Signal the of today. as Jack of more is a The place initial block, to But the take from we’re third this lateral test, foot to activity East fracking Peak – the West. phase moving eastern XX,XXX at this of lot almost is kind going year. the will

So it a what economic our is there, is indication the very know is oil will gas. meet Jack the stock to we’re as tank. every the engineer, produces know being see looking evaluation. oil for pragmatic Again, We that And mentioned, We there. in it and expectations. I like rock

same. had mile-and-a-half oil the expectations. in a looks to our to better, West absolutely is tank we So the rock The stock be met we the here thicker, that expect

should we information be able quickly. forthcoming very to be that with So

it As we want delineate. mentioned, to and Jack do systematically

next an months, the was the Spraberry, the drilled South and to all North into the that offset couple The D. operator. to from over have So we way we’ll well a lower the Wolfcamp have East, the offset West the delineate by

back So everything a time out again flowing step drilled, is in A have a again, and had there that progressing we is we Wolfcamp meeting it’s type well as expected, test mentioned the well curve early right now.

able science side a talked of we going the the ground. or us as a everything mentioned there’s we’re We about in love lot here. on and completion had optimize. bid on the to rock the Again, of drilling lot things. to ground talks out producing reacting a a we putting Jack and is So rock expected. The in side, just

extreme very saw well we results, calls the completion we the up drilling surprised on differential able again, flat from we’re for be and can very in the much like optimization driving see much group area not be front, if as our in calls, economics would our to well. peer So differentiate top drilling to ourselves

Nicholas Pope

very That is thorough.

bit. change both topics here of I helpful. little of very the a That’s appreciate kind it. you. then And For

Or shares? with out just potential all be treat those to they in money warrants Or should the indefinite? out those are I’m the the dilution there just Is On anything and continue any are converting should outstanding with happen just they’re to could on kind there. there curious the of that still side, Is financial warrants? I that – anything that timeline is fully there as there? –

Jack Hightower

had continuing another years. Good question, should it’s exercise many originally stock go gradually, be XX,XXX last that the are for capital up exercised, gain exercise week. looking shares Nick. they in how amazing be this be will realizing warrants The But warrants continued we value, to were to five and our for people and long-term are where

So exercise will taking value to the years. in of them and they’re increasing course next over money the into still and be well order over three continue that place. warrants be years, the able they for to in should the two to year-and-a-half be well And

Nicholas Pope

And it? at a I conversation, the assume even on – been it. that mean, price right? price, on while to trying they come should I Got remember, to is stock I’m to it’s shouldn’t CDRs. focused the get this

Jack Hightower

And in come in stock should stays and in gain eventually, effect investors have August. – August. $XX they be due they as our August, the as happen expire as gone. that at $XX, as And Yeah, original they no XX% will at have long a long and

Nicholas Pope

Got appreciate That’s the I had. you. time, Thank it. guys. all I

Operator

you. Thank

Our comes Robertson question Tower Water from next of Research. Jeff

open. is line Your

Jeff Robertson

does secondly, other on need change? add previously Anything Thanks. you Good fifth rig, assets in potentially to or Peak? morning. And doing curious talked a you rig accelerate some take about you would you your then and would saltwater Jack, infrastructure it if what one top? you’ll you that do talked where about I’m a Signal and a disposal rig adding of flat had

Jack Hightower

the want process. say adding as rigs. Peak. of development we is a six now. the new XX process economics to even identified of in the But around could make to decision and in terms enough Signal where when our to enough we it this deciding we and because we’re In four have going like what’s that the lots of keep we we plus peak, they of drilling depending and to we already where opportunity very to it, Good that rigs could we’re rig where half and we pad to I could having fifth a and weeks we’re and go And that, locations. these Jeff. North that Signal We things with proactive question, to at could John, process be instead down with rig drilling would with locations drilling are down part there anywhere. acreage into some the multiple it activity. decision operational of go going running contemplating go five really our up keep actually go we’re expanding at best on with of next pay and we going feel where efficient other interest with with could cost. rigs over almost our this mean, go rig, And Signal happen three go and go could it’s five right it and happening months a acquisitions, our outcome shareholders be But down have can Peak, basically we a probably to four We study it’s to maybe four course of on We – on roughly places of and go down the mid-March outs,

locations We have so and many so areas. many

cash flow. PUDs We’re increasing and drilling, do would will Anything going to not drilling, do out exploratory. our development and more or call our posts increasing go speculation we I what be in

Michael Hollis

allows either again we Hey, Jeff, in Horizontal able system top high build move anywhere dispose a that such volume SWD on part in to large of that our deep water Ellenburger field flat not. very, question, Look, center we’re the us efficiently very encircles the to basically pipeline very wells. XX-inch pipeline volumes the of of it being absolutely the

water the now it will And increase and effect. the from field have so again, slightly, zero activity production to increase

because side. Now, would year we wells it’s receiving drilling to unparalleled have kind maybe SWD months oil returns again, a drill we a Yes. those out? that instead mean might nine the future out, are of But from of

So XX%, CapEx split to conference questions about the last talked XX% for we the the call and of and East again, future or the one was the the earlier split expandable. DC about on be system side. And built

on about However, the direction split top infrastructure Peak. side, it’s between Signal and the other flat

that cuts. dollars have that based water we we change see our the the majority as ready our Peak. get vast on want as designs get we right, performance recycle budget Signal for to confirmation the in easy. information Again, that and well to a is we sizing you So and We we’ve sizing have of in to infrastructure XXXX. know the That’s the already go we in wells, implement down is system everything what SWD the have soon can just from delineation system modeling

will we top. this return we highest about out Signal again, have Again, and quickly making So for all did very doing we’re efficiently sure shareholders. in get built Peak like flat we the our

Jeff Robertson

on Can Eastern of your what – the you top of Southern of position? flat that top the next of Peak. acreage delineate or about any That your offset helping acreage others or flank was flat Signal the that’s question Thanks. Jack, you talk, that’s doing, are Mike through on end – activity side the

Jack Hightower

in operational] mean, Yeah, [ph]. [Mike I are

Michael Hollis

the we’re Jeff, really to it’s obvious the Look, us. You operator of bet. south is pretty who all tight.

of block crew way particular, here. right, production out our mentioning time. encouraging. X,XXX and active. drilling, the that, our our of friends us. extremely We the wells, operators, day. completion East They’re well a with frack above share of all to They’ve offset full you’re South all data oil all barrels two a of these to in They’re got running South acreage operators, the fairly the directly again, Many We’re South rigs of are wells ID of

they’re depth, will as operating similar that, very, If we very again, So were costs good very similar they’re operators well. rock, similar. be

it from does a other So encourage little also learning us. lot a each farther and we’re along. bit They’re

$XX, wells they’ve economic and these range, highly our Wolfcamp bit economic. Spraberry. they’re top barrel lower way down into roughly $XX they’re wells. flat at boy associated Bs co-developing We’re Wolfcamp zones of got several little more of and the right XXX,XXX a Again, the done but delineation oil South A with even They’ve area, prices, all our known gas, more

Wolfcamp flowing a test. some would I well well XXXX, of are and are think Ds is, and reasonable expect back do and of close-ology is. test thing we geology looks the us blog. us their see near test well completed like to that in good, been it acreage our D flat dog southern to on very where exciting you’ll the in And more that us the well Wolfcamp be Again, to encouraged. D close you’ll of probably again, their Another see us north but a Wolfcamp of where right that’s There’s got doing top us south has operators that,

really for So those getting guys us. we on appreciate forefront again, the

Jeff Robertson

you. Thank

Michael Hollis

you. Thank bet. You

Operator

you. Thank

Capital Our Partners. next question comes from of John ROTH White

is line open. Your

John White

Yeah.

fourth in acquired man, release looking at the Slide your Just acquisition acres, wanted – where describe top. that you through acquisition press the follow-up that to walk acreage, can on acreage if X,XXX verbally us quarter, is? the your net contiguous flat I’m X, to

Jack Hightower

on put this that at didn’t map the intentionally we stage. John,

area then The side, said acreage. way the the we become competitive. additional and of very you Northern side, side as from Howard acquiring From Eastern are to has also top. We all Borden side, Northern the and mentioned, the Southeastern flat the to

additional when possibly it are we’re And and and or South, say contiguous, specifically going successful I acreage contiguous additional we so acquisitions to until either where is. is East not and add-on, say successful, North, not it West. But

John White

the I location. you appreciate I blame don’t it, title. I can like that undisclosed Well, and for

Jack Hightower

whole and And that the the they’re to Yeah, very to in we control, And East the And – And our we too acreage in it’s the specifically, East. is a to well. far and and really in this presentations first And the one wells it’s the all they out to gone X well. over the area wells really has the like started area And the in only in have of remember peers the Western bought part foot really way and a isn’t of well Viper that’s bought further we A, happening SM coming million the West there. North East. laterals that’s then all and the to are a of us. further kept thinking County. it’s going first in just to what’s And going the And from miles Wolfcamp you coming lot competitive lot Spraberry information to of Mitchell we acres. our moving the and lower if X,XXX even area. moving a out to Wolfcamp the B exactly delineating continue D XX,XXX six moving now East, happening. went barrels. our East of Howard they The when County the the is And the A, change, those are of South

whole good area very our place. what’s excited about we’re So really taking is and looking

John White

that. more luck We’ll seeing great. up, look pass forward on. with Well, leases I’ll get it to and signed good some

Jack Hightower

Thanks, John.

Michael Hollis

Thanks.

Operator

Sir? turn Hightower CEO, the like Thank back I’d to to you. At over call this the remarks. time, closing Jack for

Jack Hightower

than thank extremely else have really I’m I I excited to just just are, I our everybody attending I to said call. we for it think, other performance. say, – about anything want all we’ve don’t in the Well, closing, And

anyway. to Our operational not worldwide that guys industry, as like enough oil increase have hate prices are doing I had The just a we prices, reinvesting we a go a job. oil because that are super basis felt going is award to whole, up on capital.

sovereign shortages, reserve in behind are the if wealth look five-year single majors horizon. and company going have way And replacement. Ukraine major not to had whether at on every We’re those from you are or the all plans, situation we the to company the big

five-year this have almost year mean XXXX. part that than last on historically averages of think of of what I been year, the less I XX% the last

supply quantity And for Thank plan and much and of time. world quality that we possibly some got making maintain problems we lifestyle. to important to much very are your very fuels be the we serious able that fossil in So can. we as going our a as being on sure terms you part provide and of of

Operator

This today’s Thank you call. participating. concludes for conference

You may now disconnect.

HighPeak Energy (HPK) 8 Mar 222021 Q4 Earnings call transcript