AXAS - Earnings call transcript Q4 2018

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Operator

Good day, ladies and gentlemen, and welcome to your Fourth Quarter 2018 Abraxas Petroleum Corporation Earnings 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 call is being recorded. I would now like to introduce your host for today’s conference Steven Harris, Chief Financial Officer. begin. may you Sir,

Steven Harris

And earnings everyone President conference joins of Heather. fourth and Abraxas quarter Abraxas, today. XXXX call. me welcome you, to to Petroleum CEO Thank Bob Watson,

Officer, addition, Bill Johnson; In VP Steve questions answer Marketing, available of our after you have Chief may and Krog; of have, Operations, we VP Kenny to any Wendel Accounting Bob’s overview.

are Commission. immediately remind press call. call our and that, is made contained call webcast forward-looking described the that like be facts could Securities available statements. risk we review from and And results with a in in I’d statements our releases. over being to replay our the vary these in that vary are could filings actual Exchange Factors encourage of to and today’s these those contained after Bob. taped filings reminder, during factors cause conclusion a to that the everyone call statements With As any everyone are considered would in like turn to the the of would materially and to will this statements, actual I not historical results

Bob Watson

always at Thanks, growth, not Abraxas policy afternoon. financial is but sound is decisions. a not growing the but Steve, for growing the all good of certainly and of cost followed just sake result of

press yesterday's month out not a will XX I are $X.XX belabor other and reported results a on that point share. release yearly than of here financial to in basis Our EBITDA a them we

need X.X they And per what an XX earnings but to be or XX%. what I'll personal a of do to earnings for is the That $X.XX you'll talked it reported to investors. I year, $XX.X month times. bit enterprise for are equates with That’s equity nevertheless are and last know a return to can we goal shareholder's year mumbo-jumbo, return our generates that approximately quite million, on full value are. my -- trailing going accounting I they shareholders hope of equity which to the do You maximize, math I EBITDA but of share which you. about is

going our by to capital cash flow quest grow. free generate and or still efficiency our decisions but Now driven forward

As our CapEx million, which allow to previously approximately uncomplete. budget announced, to we reduced XXXX drill $XX should us

complete of in Now, been report X.XX that some Bakken there complete for the that drill wells DUC wells the and drilling in seen is net and the DUC has I've Delaware. complete and and confusion X.X some net one complete well wells net analyst

can at talking we're Now, math the look you do and the be that going schedule about. to

down. curtailments, our still You'll flaring these and high constraints could wells. the by is caused in flow in plan flow. to this loaded did the the due each back type issues I weather cold to quarter we Bakken cash Delaware timing current there which prices, when and flow flexible us up report double-digit beat because allow is without fairly we to allow should most pay current our frustrating steady budget running appropriate We the frontend by they at curves faced Despite caused low quarter-to-quarter free commodity us our should Rig as the their neutral remain hate cash costs Delaware see grow occasional weather delays which very continue and well just I'm timing our of generating us usual plant trend using and current operations year-over-year flaring shutdown and production free Bakken oil and the spikes smoothly. prices the our while The processing allow to and also Raven up continue allow the upsize vendor should are glad down we debt. allow to differentials to published to see growth loaded, we horrendous we budget end to the use reaction in outages, capacity the that production of worst that The Bakken had year. cash in

excuses, has to approximated and day Now, taken production warning as the despite over in a which reduce these Boe is QX. Average for X% first new per up January which quarter, this is some February production information. XX,XXX

XX.X% will of in a I'll this week first on half working a sudden, us hopefully remediate second allow severe number flow Dakota. in these the is considerable underway, very lost the good We've amount North quarter. production. of Delaware, started has the of initiatives now In little to continued given which in half Now, talk issues us we combination outages And in. electricity now weather well the back West Luckily, lower. of had we of which own a outages, and which about a of report Pad, has first interest March the weather which just which March, have Creosote Texas, production for two we

frac week a working XX% we on one We a scheduled a well start interest. next own have where to Hackberry Pad

at block of well. it's two We’re currently is Pad where well two we which our drilling that, actually XXX% and in asked X Caprito section Woodberry offsetting those being own

own the on the well Woodberry we Well, Pad completion is moves a to stated Pad, Creosote working done. Creosote of XXX% the Delaware completion two of budget is the of in the currently interest. Now a also where drilling rig And

to us basis on that down. the will timely So, Bakken start a the on back up activity which slows gives Delaware

this out, which the Jore spring, our a we we results with six the continuation which should to and of faired going weather DUC questions. plan pleasing very sometime of Raven for be the interest. next restart soon to success oil value slowdown. service Northeast crystallization to depending this allow new work Pad and drill the production within with gas that, And Raven over that which drill from piece allowed XXH early delayed from pipelines tubing getting any in chokes as coil plug to Lillibridge weather with to in been well. well, of delayed be two Extension week retrieve Rig well on a is will bumped like Bakken up but And will permits That just also from off Raven frac production. first to X coincide increase pad this process a gas weeks. whether. get The earnest spring the started looks will sales Now, finally is the the now our is additional heretofore have in Pad weather I which We as to expect the a upon on ask kicked in amount And Delaware

Operator

comes [Operator Instructions] first Seaport And question your John Global. Aschenbeck with from

Your line is open. now

John Aschenbeck

hoping could walk bit on was a I just Bob, one the first more us year. some moving parts my for little CapEx you through or of But production

continue just which trying to get just your on certainly would a XX,XXX the just year, from as XX,XXX through general it a view? everything looking specifically of couple first CapEx? view. progression what Your Look Bakken quarterly foot there, prepared but at does from but at quarters like comfort just looks is like sale help, now at quo, liquidity What certainly remarks foot the least of the help volumes status right in the

Bob Watson

Delaware of the in have budget it the I right don’t Well, is me. in front

Bill Krog

XX.

Bob Watson

don't the two existing consumed in midyear, the about to where and item as which the said growth speak drill Rig budget on to our spring to might in should have in where them in Pad. fracing minute would be which a at then we Pad frac a to the to we ago and flow Creosote those going with of final the that’s wells up that half. Delaware until start The with and the Creosote we the are and roughly Pad us get attendant Greasewood, first six production is well X Bakken in the point our I get XXXX. budget a wells probability Greasewood fracing misspoke for expect to million the DUCs be so time Raven back in the XX pad, associated were

next flat. and So, depending quarters spike three for are continuation a basically on either then when I production completed up or Jore that of envision the wells flat

we far to an that. end our of bank let have our you a this goes, the As by to we month. And have know base liquidity expect -- in borrowing as We expect we fully have increase will upward meetings. fully already certainly,

sort So, no only the that past. not liquidity we have than think allows us growth and year some cash rather the throughout smooth flow, we about tooth pattern free experienced of our concerns reschedule in the us have issues, soft have we way to budget, generate but allows the to we

John Aschenbeck

guys do your much in larger imagine are valuable getting could parent wells in just as more with pretends But a are I one, Delaware curious second how on would -- your assets relatively parent-child these Then you of if deep discuss test I’m a one if believe end discussion. less growing Bob, And doing topical your acreage to have you wells, your at has more hoping topical days had parent average, really conservative I guess, at, And asset of for spacing. degradation what many your do wells currently? you you operator. a if was worse you attractive. my are that certainly operators is regards as the could which and be I

be So, the if appreciated? would you could just that walk us through color

Bob Watson

it. You’re things, of and appreciate I always on top John,

to like the all have the I I and more the engineer, data happier get, I an data I’m. As get can can

an spacing did, but the production toward trending tell we're XXX you the optimum results that test down still feet. are spacing around evaluating that we can't So, I

we been net spacing. why and future So, continue our on report we've locations XXX X,XXX that's to that identified

coming offset feet It how data production are XXX and doesn't to want appear where as wells, drill don't well couple in that still there in is a between So so wet, a which economic that's parent the feet you most that around away numbers them. far up degradation is have just are a for on go years it. going you small And But we one optimum that a sample it's XX% actual feet. wells Those XX% mean four is degradation. has has to probabilities, an on cuddle and well depends the XXX X,XXX distance parent in our somewhere wells on zero as we be between. to spoke probably maybe to to parent to I a well from albeit been them, close well have all would about scenario,

many being well Wolfcamp presentation how map A on or So at whether and are that can two you the wells. parent drilled some our and you -- well that pad both said, that speaking one parent see other. is to indication wells we two call have There in look section zones each each

two well, associated one well So, if a AX, well. one it's in just probably basically producing have the and wells reserve you AX just with

to A. speaking bump have So, the wells how would that parent have don't be springs it say relationship, at to difficult upper any Wolfcamp is many we we the because evidence of

So with is not Bone and mean lower two third would indication would Springs that we Springs have. Bone that that a third the Springs that’s well that well, separate upper no actually have parent Bone we a be well third test communicating the

rather So, limited data it's a set.

parent So, true we have lot to on many X,XXX locations to it’s going say a we to foot but more spacing. be even of how spacing on have, suffice XXX say drill difficult to wells

So, I and a the we've of drilling is from whole that done. degradation lot don't think there value

get we been timeframe, we can't So although, up they zones certainly them far delineation within to can improving it's our can’t five-year are but proven, there. that book now because we mainly is

John Aschenbeck

many what front great your in a I but on that's you number, total couple different, and a handy active of sure, it. I’m you can not if have in just be color take both Okay, there how parent you wells if from But attack go to sure know and your not I’m heavy children drilled be just back have know years acreage? it you you've a for that been would and so, if of helpful? right and

Bob Watson

course, of two flow we we're back on on speak. next fracing drilling And well X starting wells production, and well XX have X have wells we're we week. we as pad as a then Yes,

on production, and fracking So, back, X flow XX drilling. on two X

Operator

Thank you.

Noel Your next Palmer. question Coker Parks comes with from

Your line open. is now

Noel Parks

were with any you've you preloading Just on a last parent-child the children, more wells about before issue, few I things, if again quarter think it that? done was parent talking

Bob Watson

data in we and the the able remainder because wells Delaware, under swap that we that has hopefully between data from impart with drilled and still will really with have a getting operators our some It's not, wells. any data we child in or budget conclusion. year. to not more We’ve to data study our current be child there we’re significant agreement of whether haven’t have no planed offset But come this

and tell even Now couple more that I us the wells rig don't plan, drill to us of commodity keep years wells an any to change, see could But our child drill real expanded for going if there. on out prices having next really.

Noel Parks

And add something I’m just Delaware, in were else? going sorry, rig the of your speaking to you

Bob Watson

No.

Noel Parks

sorry. -- contract question just do far on in Okay, of or the commitment? your was sort My that as What a Delaware. next as you have rig

Bob Watson

rest Yes, commitment we’re in of it. and our basically for program that’s the our budget that’s

Noel Parks

got the Okay, second the you. Three data in speaking up Bakken? thoughts operators, the any And of offset from Forks on more

Bob Watson

in. that last have by units. interest bit the actually question second bench That’s quite happens we their are that Wiley a best be wells are operated offsetting the a and that us in have days. a the to have There working well Continental, in good discussed we data Forks of Bailey six Three actually and we five The directly

We get And wells interest, means the have are a those but what small all that working very we well. data. performing

play So, not think bench second it. giving a for there, anybody operators outside but of the are I seasoned true as accounting the target, people credit up

looked all that five-year report for don't reserve we and us program the we this SEC. second have wells, book year, to have we replaced had swap in on PUD forward. Delaware drilling we move lay to makes we ample wells would because PUDs give we yet to undeveloped PRUD, data have that data And at our data a get out Delaware, did going to Forks -- out with bench a to very the So, like probable Three we when comfort good we kind have it from them the those that of plan worthwhile

and worked our leases Continental talking in So, wells and watching it and that has we’re and the area. worked leases. between Continental There and worked study keep our watching no going geologist that to it geologic and to is those difference

is, So, second communicating I question first big the the guess bench. bench much is how the with

we bench than lot the fact bench it's completion the hopefully well. way knowledge time will time around well, second that just other. their wells tell Now are that’s our enough we causing have maybe not efficiency that But and second would you to wells, tell a to better by locations, or first or improved Continental the originally maybe the bench will get drill one better go

Noel Parks

of in sort was the of picture but at course, kind the and marketing the last And ahead serve type extended spend supposedly looking look questions, a just of range. And just this and top Bakken. bigger we barrel you’re time $XX I thinking as you a

as the people should capital acreage. saw a your can basins acquire money you were a years all were, concepts, the ago down and with actually some we of of you far where spend. instead. lot equity was slow again thoughts maybe in you making prove your might funding and go I I And some out, in what the couple you in private know for the when forward that position where being you with guess industry, just in to to try up that where As the big go to look have your them year your equity point of wondered assets way some are people might if last from exits

exploratory step you the call kind given in business or and like out that, were model you've you you how think date? basins of Just if of to a different

Bob Watson

Bakken the can our and in and better corporate Delaware. we’re that generating see I economics look Well, think you presentation in we’re considerably at the

have That’s we not up. to probably the what no that and more come because I would wish one acreage a going if wants Bakken in everybody else acreage it have. So, my wishes had we I to realistic would is similar true, wish, all give

down works if until finance Raven cash sheet So, I Delaware get in us Rig free a that we something extremely do think cash and the longer clean bunch Bakken flow. balance to the we with the have no whole with with we of

have place But it don't we company so many know landings up go that. has running starting a is and of be to got was unique because Delaware the it's getting, number to we where in be that is would going people not case, if that new good enough I that entry kind a cost think and we still pretty and now it’s certainly the go, are upside high. to would maybe I ultimate of that what of room would the zones be too locations be of just because

we the we that drive we So, have in Bakken cost Bakken. in hopeful get Delaware use equivalent that the experience in economics the it's experience the in an that can and the interesting and down I’m achieved we Delaware when that garnered area to have that

Operator

Your next with Eric comes Engel question Stifel. from

Your open. line now is

Eric Engel

the get what more and Williston buyer a you’re the to sale of getting hoping then color Just attracting? interest level little on the type in is asset of sale

Bob Watson

public that’s Eric, a all very to interest the we and small had offer large to unknown. deal from amount very don't is it can competitive the the that's from is to varies that private companies, It's to-date because going a backed say whole Well, companies, best if And pleasing it for anybody private the know it’s companies. situation And because we -- very of to which very equity does. varies we us, pleasing one that us to gamut.

and have process this just is the we the day. really least So, and we're that live every where now more have room just to in data more there just interest glad went started. gaining The getting we're at week

talk bit little you. more talking Now, we to we’ll it, concrete something as about that and sound be don't cavalier be with want can we certainly a have about, I about as soon

Eric Engel

the plan proceeds? how the goes do do if through, prioritize do with to what to Or then you sale them? you And plan

Bob Watson

order, would even up pay Delaware have to don't to back off over, to anything more any continuous that it be completely, Well, move would buying start borrow payoff the cash Then on basis thereafter. hopeful new a to operate though our cash to program in go Rig fund program to flow Raven a let free our us to we now can we continue debt, debt say where cash the left X this debt board start money the and basis down pay and There's with get free completely. enough then flow stock. in I'm and Delaware

Operator

question Rice. Mills instructions] [Operator Ron with next from Johnson comes Your

open. is line Your

Ron Mills

Good afternoon, Bob.

Just data that, this something went any more process be questions could that of a framework is a broad quarter when as Petrie how or one sense early to Is last event take? last since as just the -- framework week, or to get just that? of they I'm the expecting room in the live, were guys terms trying long second

Bob Watson

could All But says come of we're on, executing that to whether well, just at something on a we that down have mid it says, April the number no keep second execute the asset where -- the cow timeframe, it depends quarter do expect it. market we okay we start and we PP mid cash be -- to second so if have on, actually mid no, might quarter.

Ron Mills

through AX And then, B. Delaware from the across look when and well zone to look Bone performance Springs at and you as we the AX the

the to recent and on? As results they the did wells had about we vintage you continue Wolfcamp as add potentially brought a you the from the how couple likely more think the Delaware in be upcoming thinking we completions? third wells, improve like more Bone continue AX Or A to like in should that completion should of more recent B what

Bob Watson

better. they'll Hopefully, getting keep

are up. We we a to test frac continue going well to in Wolfcamp our the -- the tweak Greasewood coming B design

whether or B rather poor of So, performance first mechanical Wolfcamp we're the sure about our reservoir. that not was well

Looking drilling issues rocks, think tend that we and had number that had at on -- well a we frac the we it to of mechanical two well.

that hopeful we’re the as to rocks. opposed underperformance caused that So,

AX try more. pretty as still not again. a is looks them type are like It So, The Both it our but AX perhaps are still they we curve. beating will of the keeps good a good. AX, bit beating little as give

Bone third that. have we Spring but pleasant a very surprise, on is The data set a limited

So got even we’re though in different we production, wells on XX X zones.

So, anyone universe don’t zone. big data in have one of a we

continue hope case and guess every And to results will that Bakken I’m I I them we as of in well. that some are our So, improved hopeful over generation have going improve. the they be considerably. know design to improved the years of X Delaware to frac

Ron Mills

be think stick this foot given as what And from on well what still do cost in year? go commentary current X,XXX to laterals, you more your we you expect average environment? and link will You the any to X,XXX forward lateral

Bob Watson

study. opened study conference We was that hold some your September, last did at a eyes, those and we results people's still which XXX that announced we by that well

pretty of good data. that's a So, universe

now We our end are report that reserve in finished. the process year

have a engineering to But study. to groups updating reasons you are for the in best really a will that of data to allow the laterals process now if we short of are to those are want you with need that laterals rate We not to. unless determined of any. number say whole right of it study don't than return familiar go long that see, higher Our into that changed us that there that out the

is thought if ever process to be foot with the will it until continue laterals X,XXX going need our And says, does. so, we you long, data

Ron Mills

the cost on Okay, side. well

Bob Watson

We've actually now. reduction had a

million I think stage about XX X,XXX XX, a lateral a [RFEs] foot for frac. were our X.X that’s and

bit. using curve come little just two in in saves in from cost they have that One is basin sand So, a pressures and come obviously efficiency pumping money. learning considerably

XX or the in what achieve to the Delaware we're X.X in our all will experience between and Bakken incredibly million, Bakken consistent, So, cost wells experience down hopefully, and X.X we've were the our last Delaware. where track time. our driven in over And trying the in XX that's

Operator

would Steven remarks. showing no I’m I you. at Harris questions back time. to for Thank like the to this call further now closing turn

Steven Harris

the in Great, your earnings conference call. Abraxas we participation appreciate today

on a well start, will at which website approximately posted XX be as mentioned hours. webcast transcript I will available as replay in the our be As

hope everybody thanks So, and have a will good you day.

Operator

Everyone gentlemen, in you a does This conclude Ladies all may and you the participating for disconnect. have day. today’s conference. thank wonderful program and

Steven Harris	VP and CFO
Bob Watson	President and CEO
Bill Krog	Chief Accounting Officer
Kenny Johnson	VP, Operations
Steve Wendel	VP, Marketing
John Aschenbeck	Seaport Global
Noel Parks	Coker Palmer
Eric Engel	Stifel
Ron Mills	Johnson Rice

Abraxas Petroleum (AXAS) 14 Mar 192018 Q4 Earnings call transcript