Chord Energy (US:CHRD)2025-05-08 21:10PART I — FINANCIAL INFORMATION Financial Statements (Unaudited) For Q1 2025, Chord Energy reported total revenues of $1.22 billion and net income of $219.8 million, reflecting the significant impact of the Enerplus acquisition on financial performance and asset base Condensed Consolidated Balance Sheets As of March 31, 2025, total assets were $13.06 billion, with total liabilities at $4.44 billion and stockholders' equity at $8.62 billion, reflecting minor shifts from year-end 2024 due to share repurchases and dividends Condensed Consolidated Balance Sheet Summary (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Current Assets | $1,597,288 | $1,579,118 | | Total Property, Plant and Equipment, net | $10,714,708 | $10,686,169 | | Total Assets | $13,058,608 | $13,032,007 | | Total Current Liabilities | $1,803,199 | $1,683,978 | | Long-Term Debt | $798,824 | $842,600 | | Total Liabilities | $4,439,944 | $4,329,745 | | Total Stockholders' Equity | $8,618,664 | $8,702,262 | Condensed Consolidated Statements of Operations Q1 2025 total revenues increased to $1.22 billion with net income of $219.8 million, driven by the Enerplus acquisition, though diluted EPS decreased to $3.66 due to higher shares outstanding Statement of Operations Summary (in thousands, except per share data) | Metric | Three Months Ended Mar 31, 2025 | Three Months Ended Mar 31, 2024 | | :--- | :--- | :--- | | Total Revenues | $1,215,047 | $1,085,260 | | Oil, NGL and gas revenues | $1,103,425 | $748,162 | | Total Operating Expenses | $882,567 | $813,623 | | Operating Income | $337,996 | $272,939 | | Net Income | $219,837 | $199,353 | | Diluted EPS | $3.66 | $4.65 | | Weighted Average Diluted Shares | 59,665 | 42,747 | Condensed Consolidated Statements of Cash Flows Net cash from operating activities significantly increased to $656.9 million in Q1 2025, while investing and financing activities resulted in net cash outflows primarily for capital expenditures, debt repayments, and share repurchases Cash Flow Summary (in thousands) | Cash Flow Activity | Three Months Ended Mar 31, 2025 | Three Months Ended Mar 31, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $656,893 | $406,698 | | Net cash used in investing activities | ($292,270) | ($204,887) | | Net cash used in financing activities | ($365,819) | ($223,455) | | Decrease in cash and cash equivalents | ($1,196) | ($21,644) | | Cash and cash equivalents, end of period | $35,754 | $296,354 | Note 8: Acquisitions The company completed the Enerplus Corporation acquisition on May 31, 2024, for approximately $4.61 billion, primarily allocating $5.25 billion to oil and gas properties and recognizing $530.6 million in goodwill Enerplus Acquisition Purchase Price Consideration (in thousands) | Component | Amount | | :--- | :--- | | Common stock issued to Enerplus shareholders | $3,732,137 | | Cash paid to Enerplus shareholders | $375,813 | | Cash paid to settle Enerplus equity-based awards | $102,393 | | Cash paid to settle Enerplus credit facility | $395,000 | | Cash paid for retention bonus to Enerplus employees | $5,920 | | Total consideration transferred | $4,611,263 | - The acquisition was accounted for using the acquisition method, with assets and liabilities recorded at fair value, and the purchase price allocation remains preliminary and subject to change for up to one year7172 - Unaudited pro forma results for Q1 2024, assuming the acquisition occurred on January 1, 2023, show revenues of $1.42 billion and net income of $259.0 million7576 Note 10: Long-Term Debt In March 2025, the company issued $750.0 million of 6.750% senior notes due 2033, using proceeds to repurchase $400.0 million of 2026 notes and repay credit facility borrowings, resulting in total long-term debt of $798.8 million - Issued $750.0 million of 6.750% senior unsecured notes due 2033 in a private placement on March 13, 202585 - Concurrently, the company purchased and satisfied its $400.0 million of 6.375% senior notes due 2026, resulting in a loss on debt extinguishment of $3.5 million88 - As of March 31, 2025, the company had $60.0 million in borrowings outstanding under its credit facility and an unused borrowing capacity of $1.9 billion81 Note 14: Stockholders' Equity In Q1 2025, the company declared a $1.30 per share base cash dividend and repurchased 1,994,496 shares for $216.5 million under its $750.0 million share repurchase program, with $376.1 million remaining Dividends Declared per Share | Period | Base Dividend | Variable Dividend | Total Dividend | | :--- | :--- | :--- | :--- | | Q1 2025 | $1.30 | $— | $1.30 | | Q1 2024 | $1.25 | $2.00 | $3.25 | - During Q1 2025, the company repurchased 1,994,496 shares of common stock for a total cost of $216.5 million110 - As of March 31, 2025, $376.1 million remained available under the $750.0 million share repurchase program authorized in October 2024109110 Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the significant impact of the May 2024 Enerplus acquisition on financial comparability, highlighting expanded Q1 2025 operations with 270,855 Boepd production, strong $1.9 billion liquidity, and successful debt refinancing Overview and Recent Developments The company, an independent E&P firm in the Williston Basin, averaged 270,855 Boepd production in Q1 2025, issued $750 million in new senior notes, paid a $1.30 per share dividend, and repurchased $216.5 million of common stock - Production volumes averaged 270,855 Boepd (57% oil) in Q1 2025134 - Net cash from operations was $656.9 million and net income was $219.8 million in Q1 2025134 - Key shareholder return activities in Q1 2025 included paying a $1.30 per share base dividend and repurchasing $216.5 million of common stock134 Results of Operations Q1 2025 revenues increased to $1.22 billion from $1.09 billion YoY due to higher production volumes from the Enerplus acquisition, despite lower realized crude oil prices, while operating expenses increased but LOE per Boe decreased to $9.56 Production and Revenue Summary | Metric | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | Total Revenues (in thousands) | $1,215,047 | $1,454,674 | $1,085,260 | | Average Daily Production (Boepd) | 270,855 | 273,546 | 168,424 | | Avg. Crude Oil Sales Price ($/Bbl) | $69.11 | $68.79 | $75.32 | | Avg. NGL Sales Price ($/Bbl) | $14.18 | $10.07 | $15.09 | | Avg. Natural Gas Sales Price ($/Mcf) | $2.30 | $1.21 | $1.16 | Key Expenses per Boe | Expense per Boe | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | Lease operating expenses | $9.56 | $9.60 | $10.39 | | Gathering, processing & transportation | $3.01 | $2.90 | $3.52 | | Production taxes | $3.06 | $3.54 | $4.17 | - The increase in revenues and expenses in Q1 2025 compared to Q1 2024 is primarily due to the expanded operations following the Enerplus acquisition131133 Liquidity and Capital Resources As of March 31, 2025, the company maintained $1.94 billion in available liquidity, including $35.8 million in cash and $1.91 billion in unused credit capacity, and successfully refinanced debt by issuing $750 million in 2033 Senior Notes - Total available liquidity was $1,944.9 million as of March 31, 2025, including $35.8 million in cash and $1,909.2 million of unused borrowing capacity171 - In March 2025, the company issued $750.0 million of 6.750% senior notes due 2033 and used the proceeds to retire its 2026 senior notes and repay credit facility borrowings180181 Capital Expenditures - Q1 2025 (in thousands) | Category | Amount | | :--- | :--- | | E&P | $354,781 | | Other capital expenditures | $658 | | Capitalized interest | $1,079 | | Acquisitions | $17,876 | | Total capital expenditures | $374,394 | - Net cash from operating activities increased by $250.2 million YoY to $656.9 million, primarily due to expanded operations from the Enerplus acquisition183 Quantitative and Qualitative Disclosures About Market Risk The company faces primary market risks from commodity price fluctuations, interest rate changes, and counterparty credit risk, which are managed through hedging and dealing with high-credit-quality institutions - The company's primary market risks are commodity price fluctuations, interest rate changes, and counterparty credit risk195 - A 10% increase in crude oil prices would reduce the fair value of the unrealized derivative asset position by approximately $63.5 million, while a 10% decrease would increase it by $62.3 million198 - Interest rate risk is mainly tied to the variable-rate Credit Facility, as the $750.0 million in senior notes have a fixed rate, and a 100 basis point increase in rates would not materially impact annual interest expense based on current borrowings200 Controls and Procedures Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2025, and is currently integrating the internal controls of the recently acquired Enerplus Corporation - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of March 31, 2025205 - Following the Enerplus acquisition on May 31, 2024, the company is in the process of incorporating Enerplus's controls into its internal control over financial reporting206 PART II — OTHER INFORMATION Risk Factors The company reports no material changes to its risk factors from those disclosed in its Annual Report on Form 10-K for the year ended December 31, 2024 - There have been no material changes in risk factors from those described in the 2024 Annual Report210 Unregistered Sales of Equity Securities and Use of Proceeds During Q1 2025, the company repurchased 1,994,496 shares of common stock for $216.5 million under its publicly announced share repurchase program, with no unregistered equity securities sales Issuer Purchases of Equity Securities (Q1 2025) | Period | Total Shares Purchased | Average Price Paid per Share | Shares Purchased as Part of Program | | :--- | :--- | :--- | :--- | | Jan 2025 | 364,624 shares | $122.29 per share | 282,869 shares | | Feb 2025 | 309,524 shares | $111.74 per share | 275,416 shares | | Mar 2025 | 1,436,771 shares | $105.49 per share | 1,436,211 shares | | Total | 2,110,919 shares | $109.31 per share | 1,994,496 shares | - In Q1 2025, a total of 1,994,496 shares were repurchased for $216.5 million under the share repurchase program212