Chord Energy (US:CHRD)2022-08-03 16:00Capital Return and Dividends - Chord Energy introduced a return of capital plan with a base dividend of $1.25 per share per quarter, totaling $5.00 per share annually, and a $300 million share-repurchase program[115]. - The company declared a base dividend of $1.25 per share on August 3, 2022, and paid variable dividends of $5.94 per share during the six months ended June 30, 2022[149]. - A special dividend of $15.00 per share was declared on June 16, 2022, with a liability of $307.4 million recorded for the payment, including $294.9 million paid in July 2022[96]. - The company did not repurchase any shares during the six months ended June 30, 2022, but authorized a new share-repurchase program of up to $300.0 million in August 2022[151]. - The company authorized a share-repurchase program covering up to $150.0 million in February 2022, and subsequently repurchased 1,174,756 shares at a weighted average price of $106.25 per share for a total cost of $124.8 million[97]. - Future dividend payments will depend on the company's earnings, financial condition, and other relevant considerations as determined by the Board of Directors[150]. Mergers and Acquisitions - The merger with Whiting Petroleum was completed on July 1, 2022, involving the issuance of 22,671,871 shares and a cash payment of $245.4 million to Whiting shareholders[116]. - The OMP Merger resulted in Chord Energy receiving $160 million in cash and 20,985,668 common units from Crestwood[117]. - The merger with Whiting was unanimously approved by both companies' Boards of Directors and shareholders, indicating strong support for the strategic move[116]. - The company completed the OMP Merger on February 1, 2022, receiving $160.0 million in cash and 20,985,668 common units of Crestwood, resulting in a pre-tax gain on sale of $518.9 million[66]. - The company expects to finalize the purchase price allocation related to the merger, including the fair value of any assumed liabilities, within one year[106]. Financial Performance - Total revenues for Q2 2022 reached $789.4 million, up from $653.0 million in Q1 2022, driven by higher crude oil and natural gas prices[124]. - Crude oil revenues increased by $45.1 million to $418.9 million in Q2 2022, primarily due to a $66.6 million increase from higher realized prices[125]. - Average crude oil sales price rose to $111.79 per barrel in Q2 2022, an increase of $16.45 per barrel from Q1 2022[125]. - Net income from continuing operations was $130.8 million in Q2 2022, compared to a net loss of $19.6 million in Q1 2022[131]. - Crude oil, natural gas, and NGL revenues increased by $532.1 million to $1,032.1 million for the six months ended June 30, 2022, driven by higher realized prices and increased production volumes[128]. - Net cash provided by operating activities was $662.0 million for the six months ended June 30, 2022, an increase from $350.4 million in the same period of 2021[144]. Production and Operational Efficiency - Average production volumes were 64,079 barrels of oil equivalent per day ("Boepd") in Q2 2022, a decrease of 5,527 Boepd from Q1 2022[121]. - Approximately 94% of Chord Energy's gross operated crude oil production and nearly all of its gross operated natural gas production were connected to gathering systems as of June 30, 2022[119]. - The company is focused on generating free cash flow by operating efficiently and responsibly in the Williston Basin[114]. - The company expects to report production volumes on a three-stream basis starting in Q3 2022[121]. - Chord Energy's production volumes averaged 64,079 barrels of oil equivalent per day (Boepd) in Q2 2022, with 64% being oil[121]. Expenses and Liabilities - Total operating expenses for Q2 2022 were $458.9 million, compared to $362.6 million in Q1 2022[131]. - Lease operating expense ("LOE") was $11.61 per barrel of oil equivalent in Q2 2022, up from $10.07 in Q1 2022[131]. - General and administrative (G&A) expenses increased by $0.5 million to $24.8 million for the three months ended June 30, 2022, primarily due to merger-related fees[132]. - A net loss of $98.3 million was recorded on derivative instruments for the three months ended June 30, 2022, compared to a net loss of $367.9 million in the previous quarter[132]. - The company had total derivative liabilities of $494.6 million as of June 30, 2022, with $342.3 million classified as current liabilities[60]. Capital Expenditures - Capital expenditures totaled $110.4 million for the six months ended June 30, 2022, with $108.9 million allocated to exploration and production[148]. - E&P capital expenditures were $46.0 million in Q2 2022[121]. - Total capital expenditures for the three months ended June 30, 2022, were $46.9 million, compared to $63.5 million for the same period in 2021, indicating a decrease of approximately 26.2%[148]. Market Conditions and Price Fluctuations - Chord Energy's financial performance is significantly influenced by fluctuations in crude oil, NGL, and natural gas prices, which have been volatile due to global events[119]. - The company has implemented in-house commodities marketing to improve price realizations for its crude oil, natural gas, and NGLs[119]. - Average crude oil sales prices rose by $42.56 per barrel to $103.25 per barrel, while average natural gas sales prices increased by $3.87 per Mcf to $8.81 per Mcf for the same period[128].