ROCC - Earnings call transcript Q2 2022

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Operator

Good morning, and welcome to the Ranger Oil Corporation’s Second Quarter 2022 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Ranger's Senior Vice President and Chief Financial Officer, Rusty Kelley. ahead. go Please

Rusty Kelley

to brief joined on the thanks happy second that And made we'll us to Julia of shareholders. today non-GAAP to measures today's at Henke; CEO, are Definitions our Good note our these comparable provided take and the which results for your and at our discuss COO, I'm our second release for quarter lasting We'll we've by the discuss most our Please create Darrin both measures end GAAP measure quarter www.rangeroil.com. be remarks today. morning. Gwaltney. be found of value joining and today reconciliations call. the to strong can and year-to-date in certain presentation, progress earnings questions

statements, today actual subject number to Securities in hand it and statements meaning within Our contain Darrin. from uncertainties to Form a cause now Quarterly results forward-looking I'll be are including XX-K different the that XX-Q. Laws. statements comments those Reports of Form will could These Factors and forward-looking the in over of Annual on risks identified Federal those materially on Report our Risk to

Darrin Henke

the E&P have Ranger investors and review leader, these along strong years, materials. In has what everyone, answering Simply now for call the dialing had are we to an chance slide you've today. two ingredients Ranger looking market a an and extremely the into are sector thanks for morning, valuation. we than from deck. put, Yesterday, for updated we've transformed key second all premium well E&P for year-to-date. Good with executed results in. published quarter I hope less

defined. strategy business our First, is well

cash include capital a expertise strong cash within profitable value expanded recently through return operational flexibility strategic to growth, and our framework Discipline at strong that acquisitions to These clear have the return and returns creates a investments and balance shareholders. We organic right We price. framework. and sheet, vehicles. to multiple accretive deliver synergies

see our authorization board more of XXXX. extending in Our Year-to-date, and the program the we than investment. quarterly reloaded through At repurchased its dividend have of performance our and today. stock a and outstanding market million both our $XXX as active inaugural structure, increased very the buyback our remain our to increasing the valuations, program, June compelling shares initial Due current X% timing today planned share strength repurchasing capital payout. we we accelerated to of and our

August a Our board payable $X.XXX share declared quarterly per X. dividend of

our $XX year. approximately first reduced has balance by in end leverage strengthen, to debt an to quarter, the ratio million X.X second Our dropped sheet of half the we continued at the additional of our as the

created have significant value. bolt-ons recent Second,

which at transacted quarter are about year. were Combined, cash XX,XXX $XXX proved and estimate a value initial discount about their of funded acres purchase announced totaled transactions million to second eight highly early flow. the We assets. developed strategic bolt-ons These accretive late the and about in through the price net of this substantially PV-XX third the and in incredibly and excited the closed quarter added our

times mitigate The in we to operational thus the existing and focused working in capabilities, operating improve and our synergies, for footprint. where map transactions see on within Ford we through certainty synergies footprint. to and Eagle presentation these see has of able A expect screen our generate fit returns finding team We've today's the Please laser and been flow to opportunities Because and transactions, services, infrastructure. cycle costs free and improving additional longer refer selectively of the Our inherent expanded helping in Eagle cycle times, for been markets lower increased offset inflation. deal opportunities their access today. need our in rigs to premium our utilization the cash. laterals healthy strong Ford exists attractive interests, to

ability close create and our proven have to deals We find that meaningful value.

Next, we future inventory a high have deep return drilling of opportunities.

deep our strengthen bolt-ons inventory. already recent Our

have at Eagle to which XX year inventory commodity X,XXX the developing locations, today's shell. primarily equates estimated Ford prices, an We lower about

we of best States. Lastly, basins United in one the are operating on the

of have everything Ranger We do. an continual team we exceptional today, people focused on at improvement in

stack These of attractive not to the its Our in Eagle the results margin. high sorted markets framework. by slide created the existing cut, basins EBITDA and basins Ford said, today's Coast highlights attributes U.S. basin. are equal. public superior infrastructure, among that deck, to priced one anyone. Gulf are efficient The a to peers, slide best our a up all premium margin the an in most In close regulatory Ford being That E&P Eagle yield due oil compared and is to proximity there's

the we advantaged delivered analyst As We period. second high performance margin. strong the you to will our see, during quarter, exceeding are certainly due in expectations financial

no and Our about per of are was XX,XXX had net range. today. million. Total were oil sales that ranges. about million day. once XX,XXX barrels Adjusted barrels million. cash guidance was And were at in inflationary our guidance all expenses flow per pressures $XXX There previous and day. equivalent of within upper doubt we pro the our were of real free sales is end Costs oil adjusted $XX came EBITDA Production forma $XXX income again

how our However, pressures. exceptionally team of has proud managed our business those I’m against

$XXX as mitigate quarter, second innovative and found to capital were ways million, our the costs. we For drilling higher investments completion

little a XXXX Let talk me outlook. about our more

for capital this key remainder two Our into the plans year of fall areas.

will return completion temporary $XXX within quarter. which spot rig initial a First, to forecast. for third current adding investments to XXXX remain high included reach a rig about will guidance million, to the balance This in program quarter and believe drop rig we our we in we and year second the these pads And a develop be XXXX payout to couple to commodity will program expect of at the capital year. conclude the additive third spot completion our original one in LaSalle county. two activity our the expect back for At prices, in and drilling drilling

development ongoing with efficiencies operating activity, with recent driving and accelerated working interest our of laterals increased the because Second, bolt-ons. associated longer combined

We expect incremental increase million capital. late investments drilling volumes expected with and considerable and in These of to us as provide enter XXXX about our completion are XXXX. $XX momentum we

our the our completion detail CapEx found $XXX deck our is CapEx, can $XXX million. drilling be capital With earnings incremental and range More release. new guidance million in annual and on to slide program

summary, year's make the disciplined to allow two rigs. accretive addition that Eagle acquisitions while of are carefully program, continue investments expanding the a to screening drilling value. As we rig we historical Ford we to look to build in future rig XXXX, to three next In development our evaluating us full-time for fleet

us have And concludes to on One a take per share is our and believe we both sustainable reduce valuation. are to framework to happy levels basis. investment a expand a prepared cash meaningfully return leverage will our we for investors, lead Our ultimately allowed remarks Operator? that especially today. and your recipe, winning That creating premium questions.

Operator

now Dingmann Truist. will Instructions] ahead. the with Our Neal question is from first We [Operator go Please begin session. question-and-answer

Neal Dingmann

the how just to for maybe modeling, speak obtained the thanks morning, – I you for of just in comments. of maybe things – sense trying C for if looking we was get cadence if And I'm get more year. Good – question, of and to to Darrin, D&C guys. production might you're well of idea is some I'm My kind at saying could that could first speak a the a to trying of end the maybe want wondering into to the spending better shape and how as through you

Darrin Henke

Yes. Thank happy that. Neal. address you, Be to

So currently. and We'll and drilling the half of get then we last online the quarter. well of third rig spot picked second the complete the those up second its those about the quarter third end it's in wells

to online. due the in those the in capital the you an quarter capital third quarter in Most being see spot the XXXX, increase you'll in fourth first as capital wells in of third second and So quarter, and primarily that bring benefit we quarter to that see the of rig. deployed relative

see the the more see our And half of Neal? to the similar first quarter, quarter. back so if the a through quarter your on Does that that increase math for in third guidance fourth you work versus year capital pull the production. you'll in also question, nice you'll our fourth And answer

Neal Dingmann

wondering, or still where spend is talking I'm does. just have that, know And looking of you it cognizant think you, wondering, XXXX. you not spending, Rusty, that XQ to in the maybe into that determine that too anything you you're anything I plan is – of we don't get type XXXX end – Well, is about year specific, just not for that can XXXX also as maybe there, it I kind bit, guide, going I'm having early it about so talked just I'm for the again, XQ know, XXXX in out down being a little about of where

Rusty Kelley

Yes.

So we're thinking adding program, which materially. be grow single standpoint. two early have rig will the our would but of if from it in depends probably next will course kind if year, we're of kind a production growth of what when but to year, we full-time it third a going see production low-to-mid there be digit increase XXXX, in our we would a going and we're said, digit XXXX materially fleet, the to about But add growth as add If annualized also of growth to looking teens, rig at add considering production XXXX double it as our at two rig XXXX, we rig third range. course we're production the we in fairly capital, we mid-to-high versus stay we

just be and to to got a excited So et supply entire that that look because we cetera. from third make there an as two services frac today. We be at want our rig. certainly a support ready opportunity the and rig. services, have rigs standpoint it it we efficiency adding to rig similar more all perform sand, is certainly We the in as the you, lot add at than to operational levels it fleet got chain It's sure execution our the pipe, to about

Neal Dingmann

Austin could or the Oh, lastly call hear on play? pretty great chatter you production the your the give – I'm some, what I'm on to market curious to your hearing would as I out plans there, that And then sounds on view Darrin, maybe specifically growth. in Chalk, exciting like

Darrin Henke

this two been highlights have around brought Lavaca acreage two legacy this that in that there's rigs been have our exciting production one by counties. There's and EOG pretty week, acreage one in our next one in cumulative a Austin definitely a There's Yeah, BP year. Gonzales recent chalk to point. recently some by permit and offsetting recent by permit well or COP, filed completions wells in rates Wells. at Chalk year by Austin just late to application we EOG drill by submitted an and perhaps drill we drill And to an well for a for one the

going things running as of a offset room the lot really around on it in Austin risk operators study a we've we basis intend chalk from in doing. when Chalk the And are So certainly we said makes before, are as returns acreage. And have sense a in Austin of what to well. our the adjusted and lot

Neal Dingmann

Great about activity. Thanks that to Yeah. other hear all guys.

quarter. Next

Darrin Henke

Thank you.

Operator

is question Michael Rice. Johnson Please ahead. next from Furrow go The with

Michael Furrow

for Thanks good taking morning. my Hi, question.

opportunities these the M&A a in these being possibly regards targeted, a some market? in basin Are there's current between in smaller eight or quick lack sellers the one buyers because to year. just the bolt-ons larger of during transactions scale and disconnection So

Darrin Henke

successful. been We've

operators bolt-ons that I how Oil Ranger think to position. they the look you our fit due they and really may fact and just size synergies create with around not the they other at for for existing when in the

to of there. at a think $XXX Ford, across of for entities, $XXX million think a from are for will And of that to quarter a look scale competition that's we a already different create so there's likely other of at absolutely million entities, the just available going lot in And looking marketplace also M&A you're larger all and broader are their range, number be executed but competition. and million effort willing next a opportunities to we certainly to opportunities there's in, think other table at the we pay there's to on them beyond. There's Eagle sizes. more to-date lot when and above companies. that these be there's working $XXX kind tough I come opportunities to – parties We their be a And we've then tactical they'll up When eight that an we'll you out at those less opportunities. are to where compete be

bolt-ons transactions approach, a success and where M&A And the the think then continuing so will Ranger of larger tactical the barbell front. we that best of have the about on odds being talk we

Michael Furrow

color. the appreciate Great.

Darrin Henke

bet. You Michael. Thank you.

Operator

is The Davis ahead. RBC. Please from next with go question Petros

Davis Petros

thanks Hey, morning my for good all taking questions.

and one for we next program maybe mid-June year, but tactical bolt-ons free all step think versus how returns kind are cash to about pace to using you, nice think reloading of how of in buyback when that It's Darrin, of going all buyback cash and allocation you flow to forward? for of first see enhance more for should about flow the going stock these do kind it's willing defend you keep that kind The active forward? mid just of kind been been free to and

Darrin Henke

pillars acquisitions cash It's potentially down and. these of we doing of really more We're as share we're and not strategic investment. then this that Return see organic four all cash additional flow, allocating we buckets, shareholders in things of opportunity think we're an we via to the future be it's year, free on. focus when the well. that'll repurchases. generating allocation It's free four four course, that And debt. with of And cash really about free all dividend either it's see accretive that additional cash. Yeah, the flow think or of we or we both these the the paying

risk our So it's shareholders our a basis. to on commitment adjusted

most there's value our shareholders. our will than We where most the accretion for dollars invest

Davis Petros

of in within been – maybe Got inflation to to little been all the again, remarks, maybe kind doing what's that see the budget. it's then kind all expand it upper-end a talked are all options. And on kind hear just to it. about bit keep but front, to in second specifically of if your keep kind keeping Good you good anything you of prepared one nice able managing you initial can And better of relative that on peers? XXXX, to you costs But provide color have acquisitions drilling look how post recent recognizing guidance all kind along bit three sense? amount as is efficiency of less year's this we into some a that for next more or like you a but you a later little pace any any where can can run makes I there, at maybe get spending, don't program on of if there gains these maybe of, little can rig year's add that guess, maybe and out growth, to

Darrin Henke

into a I've digging be heard couple might them well. Julia able Yeah. me I'll questions help and there. to as in start out

So longer drilling how managed than the than, this we've think year-to-date, when inflation it about years. materially few year and laterals we're you last

in out and time well. our the ultimately that also lengthen down on that so frac drives to wells. which the the pump stages, We've increased location, spend the reduces per on frac dollar rate our drops, And the foot on plugs, allowed we reduces us that's

that's So inflation. mitigate that's also us another helped efficiency gain that

going we inch pipe the in higher to the to jobs further. long going be half we're on forward the casing, to stages X.X even transitioning even year, to us stream production X out and frac rates look that's inch our from As pump of lengthen second allow

working again, interest half that only additional did the up line in wells. So second The in our of year. will we efficiencies pick providing for keep costs bolt-ons existing not additional the

we drill next so intend again, completed the acreage increasing your add into wells really the increased foot. onto interest probably bolt-ons, dollar in rigs efficiency from without our that XXXX year. per the lengths you're it this via that reduces those laterals, you're look longer year-over-year just think drilling. the that again We when your to at all that later bought acreage, that we you'll also year acreage – wells going see And So, will to in more. because legacy across new greater lateral lateral the program options program, lateral many increasing about increasing have capital we We're we plus planned lengths will having that by

Davis Petros

to that. to kind it. in services third in year? color looking you you're the just onto of on or leading a is And have hear. edge of Do at last when Got what maybe one maybe looking rig considering inflation take kind Good at any next rigs

Darrin Henke

prices to year. where at, increases at tough commodity they're haven't late much It's the go we predict with as seen much in what as saw where inflation earlier will we as of pressure, than

stay it. what we're on execute necessarily cost to service choosing plans, that market inflation best I a can really lowest too our the it us that's of cost partners. when ability for will and their top is and hopefully it'll you, program to staying So looking we the and overall maybe but value, We're early what good at be sign check. about It's we're is predict, for think efficiencies, assure the in but will value where our testing not their provider, that But us.

to So too starting it abatement. but tell for sure, some we're top to of of early hope on and we're I signs see

Davis Petros

Appreciate Understood. time. the

Darrin Henke

you, Yes, sir. Davis. Thank

Operator

from The Instructions] go Pope Seaport next [Operator Nicholas is with Research. question Please ahead

Nicholas Pope

of of which on are are the think side what everyone. components morning, those inflation following seems like you're seems of to the kind and of LOE operating like of comments. preview, relative profile? what process, it's installation I operating costs you on seeing up the more you kind Good flat kind where fairly kind the drivers curious Kind with on interested the the the are, gathering side, the just of on cost

Julia Gwaltney

on projects great were had and risk us and running the These than a doing question. the the opportunities tubing, of for consistently on gives the a and many highlight jumped we delivering are great production second increase. between finding workover side. ran team part Yeah. wells production to we a really to we expense work workover Thanks our of objectives identified. workover back quarter, in year, that lower second work, projects capital and our drilling program, payout we doing as online, because In added rig the about the identifying slightly less asking as in the one field, workovers. meeting me they're so month, staying chance last rig Thanks. get That Where average on well that and

added opportunities Continued a to we rig. feed pipeline week this and third of that just

expense, piece and additional an our business off for really it quickly out of it’s forward. good to hats to So team projects a but it's if pay extremely continuing push

Nicholas Pope

is sure not you're activity inflation, sounds on classify that that mean, that work. a I as as I be like at the is there lot that, that if more having that? to where production how of kind I'm sounds doing Is if maintenance is it seems I'd activity wedge added? that more it that you type of been like should kind Is interpret LOE look

Julia Gwaltney

it cost Yes, for component everybody's has as the a continue as our to our component prices up. for stabilize operating it base that, component well. about expense is aware is Fuel, hard well. gone to a opportunities our a We'll it. us it look There flatten complain decline. fuel It's of is to much base, but to of

Nicholas Pope

That's Thank all I it. I the appreciate you. Got comments. had.

Darrin Henke

Nick. Thanks,

Operator

the I session. question-and-answer Henke over like our to back concludes for any closing conference remarks Darrin This would to turn

Darrin Henke

up acquisitions efforts which another relentless sheet, excellence, transformational and to directly to to pursuit XXXX Thanks forward truly on balance call the the look year be our reduction, contractors for Ranger, the program a dividend all non-deal for tireless you all shows. In seeing share year. Between is closed again, the for We their of debt both today. on of repurchase many of company. to are Ranger strengthening and conclusion. of and the employees I, thank shaping wish contributing implementation firing our joining already upcoming road multitude this and cylinders.

Operator

is now concluded. for conference Thank you today's The attending presentation.

now may disconnect. You

Ranger Oil (ROCC) 3 Aug 222022 Q2 Earnings call transcript