ROSE - Earnings call transcript Q4 2018 | Rose Hill Acquisition Corp

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Operator

Good day, ladies and gentlemen, and welcome to the Rosehill Resources Q4 2018 Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference call is being recorded. At this time, I would like to turn the call over to your host, John Crain, Director of Investor Relations. ahead. go Please

John Crain

Craig Good call John. operating and to results. forward-looking welcome financial operational key Thank and updates review morning, Rosehill conference financial statements, the cover to After XXXX will Resources' today's review performance. items, you, I everyone Owen fourth and quarter

CEO today emergency. is Hana, today's We to of I Brian Also Chairman then reasonable and today We due joining our the would forward-looking will on session on Geology. Ayers, that based with call the measures. will certain assumptions. a Craig question-and-answer includes with is our you us President Vice some Gary have call believe not and us close are a our non-GAAP financial like family to brief and call expectations statements comments. remind

and cause forward-looking over However, discuss. we full encourage from number factors to a and With the in of that, statements Craig. to will our GAAP disclosure differ materially now read call I what results filings turn yesterday's earnings you the our on reconciliations release. to included We could SEC

Craig Owen

have in Gary's year echoing our both range and EBITDAX. last thoughts Thank the company. press to end us to you, you to the set, in of would quarter and earnings to their difficult of been everyone comments have thank Gary, accomplishments of met and adjusted our family call prayers and today. tremendous and John, go today our Moving surpass a know Su Gary attending and Rosehill's update for XXXX with we our We targets release this time for and fourth liked all out was during production We filed night. guidance upper the

redetermination boost an liquidity base that carried XXXX from into our a over Southern our have announced We Delaware our sale. by a position borrowing and in million asset acreage expansion $XXX in with in moment

day, per oil to third was net up quarter XX,XXX the barrels fourth of equivalent the production quarter, our average XXXX. XX% For of compared

BOEs our per for and by XXXX the our For of of than amount XXXX, have year more XXXX top day production was exceeded end the guidance range Xx XX,XXX X%. the average net full-year

Our fourth is Northern bringing strong in that and from were our also Delaware wells area results continued production well in growth back from by the quarter. in [indiscernible] driven online quarter shut third activity

operating Proven Earlier are now the year by we starting previous an XXXX that the a increased We lease PV-XX XXXX, above XXXX. level. month, decreasing during the XX% operating $XXX to These we of borrowing increased progress $X.XX by infrastructure our grew almost cost our reserves in significantly this which over increase as reach year. and in scale G&A $XX cash XX% to Compared quarter lease direct the over to million million, expense improvements fourth BOE G&A XXX% pay from of drove cash last continued off combined results production. base of or are per reserves our released These investments third on first and and $X.XX per quarter, our in XX%. quarter. reduced we’ve BOE result achievements our

guidance County no earlier, mentioned production sale this our XXXX reserves. Lea impact I on meaningful small our liquidity to to provides impact with sale will closing. asset our upon borrowing our our or New profile. County, As in Mexico increase base of along improvement Lea It very has have announced The a assets

Delaware acreage seven net footprint website XX% from We've Southern existing further agreement to to now map providing announced Delaware from blocks high in to Our presentation acreage acreage our This contiguous the our laterals to investor our for a allowing updated up quality our and extended at in drilling our recently wells acres farm-in current acres Delaware XX,XXX is scale up earn Southern farm-in on infrastructure. present allows highlight position. almost how our us carry. in X,XXX Southern

update Turning remain this our drilled on We to acreage. a now Southern wells active the Delaware. broader XX on on asset development and of

to on we've flow we these expect completed earnings have six recently additional we have information we In the those we’ve share when data. and in Southern wells identified deck, back results updated our We provided release all soon post in wells Delaware. our on will wells investor drilled

initial encouraged quarter we’ve in flow South we the well drilled uncompleted to in quarter, fourth and results our ESP well for indicated, well in is installed this results Altogether, ESP's month quarter in activity XXXX results wells weighted earnings soon production release. -- the wells and towards previously the the are current be drilled plan X to brought interval. and encouraged expect Northern ending are in along wells the area, half highly count completed potential provided Wolfcamp X we our horizontal lease we our the on back. and XX A the on with Z&T Southern our As X, production forecasted pace, Shale our Due completed these lower of the an Delaware the install in on In Bone well three-well initial a Xnd back and the our Earlier with to we of summarized on the year. with These Delaware after are pad wells. our third net with drilled targeting this we Spring first data. quarter a on formation this

our intent or as overall for agreement, previously line plan to in cash flow. asset unlevered guidance a announced increasing As our of our change XXXX result keep expected including liquidity or farm-in the EBITDAX not CapEx did mentioned, with sale, our

responsive dynamic environment. mix significant price remain to be any the in and commodity Our and positioned changes activity count to we well be

million of BOEs XX% Now turning Fourth natural to financial the revenues balance comprised XX,XXX totaled NGLs gas. were oil, $XX results. quarter per day crude XX% and and production

generated $XXX.X which $XX.X of non-cash the gain the million quarter of fourth of We commodity $XX.X XX% reported an million XXXX. a adjusted increase of on XXXX, diluted pre-tax fourth $X.XX EBITDA million included the for of to compared per unsettled third For Rosehill income quarter, net derivative instruments. quarter or share,

barrel the per for quarter averaged and fourth both price realized oil total realized equivalent of of a BOE, basis. $XX.XX per unhedged Our on $XX.XX an price oil

XX, Turning in which per million significant unit XX% a by $XX required asset cost, early first in expense of liquidity compared pro forma fourth operating infrastructure cash $XX.X our capital as transportation million. Altogether, operating lease and Delaware noteworthy including cash our BOE scale. produced or Delaware G&A $X coordination further is operating the expense BOE, the was which million or XXXX. million in direct December $XXX in $X.XX $X.X for and This considering water. our liquidity close per million could expenses gathering expected taxes $X.X produce amount quarter were $X.XX liquidity area of earlier, given per forma million consisted have BOE, in is of in system a the production Northern This were to production monetization Total XX, per at balanced million this XXXX $X.XX improve increased year per several basis, or leverage County is our XXXX in level potential total of in in Southern strong plan realized $X.XX million BOE. $XX.XX to our BOE of economies sale to of or down and to progress, improved Lea We borrowing water we level or XXXX. and included process redetermination expense our $XXX April the liquidity to mentioned initial profile. BOE, pro was that we feel our and at December of production $X.X initiatives and of quarter throughout cash expenses the On base consistently quarter cost especially fourth per

hedging. to Turning

are excited Earlier our fourth volatile a We update lastly, French in but of as Midland/Cushing positions natural announced David quickly and basis Rosehill that WTI, gas the well President oil XXXX press our through welcome his strong pleased Swaps David, brief I'd like fixed-price as summer outlined have price have Executive to as for XXXX great leadership be did transition. have recently not joining we gas During to time, a and on the and Officer. fixed And we We're a asset a vast experience any a month, environment. confidence hedge oil XXXX. the that we're Chief over further oil will positions release. be These in add added swaps leadership this a price Basis quarter and became new Rosehill. this premium during will to what of book at for tremendous amount provide [ph] to

And future. ensure forward remain questions. the leadership to to to a officially with as [indiscernible], weeks assume Gary and to continue we’re few indicated, closely in this David previously to with and role involved the expect in And Chairman our to him company near that, transition. the investors introducing ready look We be take we’ve of Board smooth will a we

Operator

[Operator Thank go Instructions] from sir. Neal SunTrust. Our question Please ahead. Dingmann first from you, comes

Neal Dingmann

two the question Could you X the about areas for here. how -- see the South. enter sort remainder on questions talked my of overall is Craig, the wells as between sort split year, you just two the coming you all. this and Morning two? the One, year between activity of about talk you in next just

Craig Owen

Yes.

will our ebb as as balanced between we two up plan date and less in be activity profile, balance the it and we will it I kind between think into through. to rest move XXXX, for South the But the the development Right we the profile, as we certainly year. I for in now The of year. say rough are dynamic in between than production as rigs North of of will majority certainly be get expect -- result we We two early will that both of been the we year, and averaging finish their of part kind are etcetera. we year, and South has certainly increasingly become the areas as flexible that and flow be said,

Neal Dingmann

you looking currently maybe just South, after going for could or if if to how how remainder about into details maybe you -- that of the of cadence again just about then attacking or at thinking you’re the sort looking are with at on, you you And the X the year the and on this the remainder wells next how Brian year cadence, South, guys? that go or on would the you’re going of come particularly talk

Craig Owen

good. answer Brian best that. sounds That probably

Brian Ayers

fracking now we’ve while our south X, a Silow finished end we right be Silow, running DUCs. running of and in going well rig of away crew we got We’ve then frac we slide the XX are breakdown deck north, that in DUCs a two back rig while. to XX, up, on a on then that now. a frac of crew what’s up back send Page Neal, going we After handful has Yes, the that got right very and fact a got just short the got well finish in the the frac and going block. XX going farm-in bring months the if to we’re on you rig going could first new to Neal, and for the the We've fracking will is are to drill to go about

will fourth the drilling rig of finish beginning wells will around back We rig and that for long quarter, back bring October. reach come the

one of still kind drill two in for be the probably will a year your we sense, first and in question because south of on given because thirds balancing lease closer of to kind our I kind year and bit of some working of of thought part are rough there's process farm-in, think for little this our clocks north and next address half-and-half. imposed -- at there, third -- Neal. schedule, But we the to of

Neal Dingmann

are could, on you flowing then, south? you about about wells the just or everything -- sort forward, do one, these think newer going will you down are think how south maybe And Brian, just wells Okay. best? I on just of do talk put What if ultimately will the you last these immediately on lift

Brian Ayers

start flow Well, to in back. fact we

year. as We pad three-well a we That East We a first actually the have wells that our last DUC. of well North the is Blanco track fracked and well drilled the side. flank well had State we had Estate Trees our X on on Trees

As a we Wolfcamp well B four-well one a X in completed Wolf wells. -- pad, was as that

pad two-well the stack we flank Trees Estate's and On a X of pad. B track, have fracked. have east All been that A a it's actually &

The back have first flowing week. for a four been about

week. is but We excited go on are those we're going to first what pump wells of seeing next really about now, the

is plan pump all days. within of have to Our about four XX those on

week to flow going start a so, So kind then forward, expect [ph]. the lift stable we allow and for of get wells or to back

Neal Dingmann

you Very good. all. Thank

Brian Ayers

Neal. Thanks,

Brian Ayers

Thank you.

Operator

Thank you.

next Our from question Tuohy Please from Campbell Brothers. ahead. Jeffrey go comes

Jeffrey Campbell

morning. Good

thought want ask that I our speed was thing what with considering already how kind is view, just first to already doing, well to question. guys are wondering The think active worked Rose David very are getting you of I just about ongoing? a and plans XXXX and out up is

Craig Owen

already homework and process is Gary. even a Yes, to running. the the of He done with hit ground he gets lot door, obviously Board has the before doing a he lot the in

So up Obviously, will speed running plan. very to running learn well. he more, fairly he he get the knows the got company has well, with but

a of he will of be said, member as the Board As Directors you well.

as this company we plan the on we year, the but forward. of So strategically guiding move executing kind for

seamless, So But, in investors as quickly, addition a exactly remains expect in so entire well seamless, and since the if I it, to transition. will at But don't just know fairly as forth get hiccup call especially to back question, be with well, and not he and if management first, the to due but that help up that two fully on that he well team. company elevating think will don’t will within Jeff, chair David's answered speed or the we as max it months I course. so with transition up your Gary all,

Jeffrey Campbell

I opportunities was in for the increased of we We acquisition. XXXX. about appreciate wondering, we was No, a increasing see potential I acquisition I think are County kind answer. Pecos talk always just looking that great for that.

So type one I a year? was that just small acquisition for should itself during wondering about your position appetite bolt-on the a versus present larger

Brian Ayers

Brian some agree there be things here. we happening dear I that this would year. will that see

us. drill -- this But we number, want going would Craig, it's well I earn works think certainly be, to I end range to I a [indiscernible] on the the of really don’t there forward will top year small actually the focus for to rock. what size know right? capacity things. route, real best a address We which can't have do our but We what We you is the bit? probably like think

Craig Owen

think kind we capital we can sweet I should driller our of Yes, of earning there said, lot in our these a of opportunity balance with as plan. are spot -- within earns think be what kind Brian farm-ins do

change that. We We even we said are changing really this our not farm-in looking not with to are capital plan.

within but it We we've So for be we look is. structure. our that certainly to those will other significantly, managed opportunities liquidity stay way looking where that disciplined, or like the using liquidity go now can not on again. are increased And that we the

game. -- So balanced, we cost opportunities, but look will be they throughout with the will course, play of kind to the those of

Jeffrey Campbell

Okay. That’s helpful.

you zones Delaware in be, just that are and -- Looking at to Northern Slide to but you produced in program, to the could as both can want and XXXX be Delaware you specific going you the Southern identify as XXXX? be I’m thinking about asking primary

Craig Owen

Shale, we we Up drill we We Bone going A drilling are the out because complete all a Xrd there if well the A Spring wells. along drill get the tank. North, through Bone Shale X/Y Wolfcamp found Wolfcamp Spring and best on focus Yes. zones. too Xrd down A that's the commonly one We and that to

well Bone we Bone We are to be Spring & X believe drilling on the Sand. probably Wolfcamp South, mix. have will focus going I they Xnd B. also in the In the A Spring the

Jeffrey Campbell

you’re was very wondering shorter spending just cash in were is, which make returns? longer going That your made of still laterals, commonly what question are be to flows align wells will versus I laterals And you as helpful. was XXXX. more Okay. percentage clear, told and my it last strong economics

Craig Owen

South, the In to the thanks farm-in.

going are drill Reach to wells. Long in X We XXXX

and that substantial notice in you to you post Reach the wells forward, will the of X, deal, chart is we've a again that tranche Going to if -- Page Long got South, do. on refer this

are of I our or Long to order In fact on Reach. XX% be of wells the going would so going forward, that expect very

Jeffrey Campbell

to him great. Okay, soon. That’s very look forward will hi I us. for say David seeing helpful. Well, We Thanks. to

Craig Owen

Jeff. Thanks lot, a

Operator

you. Thank

comes next go ahead. Please Our Jeff from Markets. question from Capital Grampp Northland

Jeff Grampp

the curious, strategically Nice months front -- nice thought liquidity change guys. how ago? guess, it couple on monetization than different, a quarter. improvement potential guys of regards morning, you here. made thinking I Was Good timeliness anything about that on or a at in all Craig, strategy you obviously Is regarding guys maybe to process just your or water

Craig Owen

comments. as the Yes, in nothing strategically different mentioned we

initiatives are of we are active working. in a number that that including We one, actively

nothing that strategic plans. in changing strategic nothing or So

and mentioned, certainly future production what our that we've pull But given including seeing pace make update We development that we potential that the we we said got address are at timeline. like certainly is we changed. we changes and has sure time. and that deal trigger deals explore path, we for we still in not We your then in will are sense -- done and sense, what we done, any makes it going as or and but new we’re then certainly date that -- where on nothing and capital can makes changing or to any any in potential anything are will that get nothing announced plan are that to the year, others water, among actively we otherwise looking on will do that still if To broad like that, answer we deal or time. at potential question, get

Jeff Grampp

was on any then you guys if or assessment I after you things longer or curious off mature, curious of kind Loving, Understood. not how what wells wells was view Okay. that of you kind kind flowing of that it naturally of maybe guys how And have can of guys and you installation a many newer kind of term? establishing uplift a kind production there? how Are have kind of guess of kind line to have just make you that just those history you up ESP do that hand, I’m And sort I curve curious guys just that kind is these knowing fryer the that, track trend did higher if opportunities in on on of it. down the shorter-term you of

Brian Ayers

That is a question. great Brian here.

pleased well we that pumping the first extremely are a with ran We last month.

certain go, It's not to curve. long-term are impact going not not have yet. going we is what how the certain We is to how we that are going see the a I seen. are believe factor I but shift in to with believe see oil much we quite actually would pumps the

seeing and it substantial increase be very to are change. a We seems rate stable

to going have We 'XX think and 'XX it's great, I in drilled several are -- for great be wells this. that XXXX,

So five the the do I on going more a lot of we if or into this order think North. XXXX. could we'll see six in And year good,

Jeff Grampp

quick upside type put the to to into what Okay, guys great. at this potential on an cost talk would of of baked any if this that, guidance you or is real performance? continue that’s and you to see around of kind And say all just related can you ESP is there

Craig Owen

per I on of of that well. the first Yes, cost. that your think $XXX,XXX the order Cost is part is

kind could production it's any had to -- of an but We what We we ESP, guidance, As they not conservative think far but the we fairly we have say do or I obviously of North. because we test on what into history. seen something don’t knew kind don't those having results baked volumes were going do, there, -- I are as mean are. to we in in the doesn't

we one So but one. go in said, this well and we that we got go will and test history production we as as on, with ESP others will as more on the get North update Brian we

Jeff Grampp

All right.

time appreciate I guys. Thanks. good. Sounds the

Craig Owen

you. Thank

Operator

Thank you.

from from go Mike ahead. Seaport Kelly Our Please next Global. comes question

Mike Kelly

where likely get how morning, strategy curious I’m sense what’s use Craig, Thanks. of are deal? you guys done, guys. potentially you you this a Good or this change water could in all deal on of if us give does just maybe at at proceeds most the 'XX? a it And Thanks.

Craig Owen

and working both North us. monetizing assets the South. certainly the mentioned in we mature got script Mike, those North, our we're call and exploring joining The now think we’ve been in thanks North tour with are the and the Yes, for potentially assets I the and that in assets more that's Sure, on what we now.

South the at We are not point. exploring this

that potential dozens. We’ve road to are buyers where that of a we that's that end over with bit the a talked the started we in number quite we’ve So gone 'XX. the of down process, time, and in before

canvassed the we I pretty area we’ve So well. -- think

as it kind plan our smart is. and it as example, something with always because the half to and the those said, will relatively quickly, pay sale is will want but debt do of year go second be first proceeds now the those we'd get again for how that decision, monetization, and we continue final down proceeds we doing path of as this or think water environment of strengthens But and kind levels about down made this think year of narrow kind and of our if commodity to We as if of there. be in half the quickly -- price kind dynamic be we’re commodity we be and pay and towards we keep revolver the from used Certainly it but it -- the an haven't we existing of Mike, things. I down very the in if, the would use

Mike Kelly

Thanks. in touched have did. acreage the that? Mexico then you associated Thanks. what prepared curious number this answer. you was give up great if a with bit, have And remarks, and that And switching the apologies But also production did you you sold, little that your Okay, there? you in on gears New left may acreage us

Craig Owen

production with And Yes, we the selling. buyer. our provide agreement in in we to are can't acreage, this Mike, that of assets on Lea that. with But County others all information on is may or just our Brian John the room, look know data the

Brian Ayers

been It's look mid the last at if time. just back, in back pretty that the in well that year. And on have the that just we’ve in of clear we net. XXX July production, the XXX's, one And rates we Mike. provided acreage you

look and probably apply that that could decline at kind well saw number you whatever you into production of and So way. back fit a

Mike Kelly

guys. Thanks, Perfect.

Operator

you. Thank

Craig Owen

Thanks, Mike.

Operator

[Operator Instructions] Eric The question comes Please next from ahead. Stifel. from Engel go

Eric Engel

Hey, guys.

follow-up Another question water the on business.

deal the water that deal You that will potential mentioned points What of do assets. Rosehill? sale you makes sense or things a for for are that the the makes basin Northern deal Delaware of some sense make

Craig Owen

Eric, Yes, question. thanks for the

a think standpoint. you it that forward do deal, -- go down it have move I it comes basis, always you does economic economic makes from have to, we we the production. is we the to what water, transaction that example. can't right do partner for sense our on can't And certainly move an valuation a If

that created they’ve be that to potential with that operating history. not thing. type was got partner very something an want we yesterday, They’re comfortable So of

invested forward play. that rate, $XX into the that system of we So then kind a got all side. on that’s what comes in go We’ve do entire on And make kind sense? agreed numbers to roughly the of and million, operational so

others have done, some or this dispose us rate On agree I today. so to think IR you that. just it like example, For roughly cost deck, water for to in these and $X.XX for we a move go forward have higher our monetization

moving be LOE it to for on example. that structure live to rate, want cost forward, would within potentially a able you So increase

sure that your cost it's So to of to we and are valuation what ultimately any structure. that want makes does sense, operator we ultimately but make do comfortable history, there

Eric Engel

a answer. a crew. bring back about make different or am efficiencies you you're be I’m dropping when right? sure Good rig you're not And you year. then, then back I assuming earlier rig thinking to losing and bringing you rig you that And Thanks. and and also mentioned this get that a going it that that drilling any drop How do then it

Craig Owen

planning doing are actually we Well, that. on

close will and -- We the and farm are now the right plan get now where us going is that’s to at somebody hot rig to crew our let's same hot say, that we’re out to pretty a work same rig back. to

QX we'd to is last have So up a thing cold cold start to in and and rig our crew. have again like do a

Eric Engel

sense, Okay. all That Thank yup. I That’s had. makes you.

Brian Ayers

Thank you.

Craig Owen

Eric. Thanks,

Operator

the Q&A would our for go time, ahead. over Chief concludes to closing this to Financial session. call This At Officer, remarks. Craig turn Owen, I like Please

Craig Owen

thank Thanks, joining today. [indiscernible] and the everyone for call

We throughout busy are on pleased to that accomplish year. for concludes what have had with able we’re great building call. to look a Thank earnings start fourth the quarter in during your success XXXX We’ve you to and forward productive we the a and and and the had This XXXX. our day. quarter momentum interest

Operator

for gentlemen ladies This and today's program. you Thank attending the conference. concludes

You may all disconnect. Good day.

Rose Hill Acquisition (ROSE) 28 Mar 192018 Q4 Earnings call transcript