SilverBow Resources(US:SBOW)2024-05-02 20:05Production and Revenue - SilverBow's average net production for Q1 2024 increased by 80% year-over-year to 91.4 MBoe/d, with oil production rising nearly 116% to 24.5 thousand barrels per day [126]. - The company's oil and gas revenues for Q1 2024 were $256.7 million, a 83% increase from $140.0 million in Q1 2023, primarily driven by increased production volumes from the South Texas Acquisition [134]. - The production volume increase from the South Texas Acquisition was approximately 2,500 MBoe, contributing to the overall revenue growth [137]. Financial Performance - SilverBow reduced its total debt by $178 million to $1.4 billion as of April 30, 2024, following a strategic shift in capital investments towards liquids-rich development [127]. - Average realized prices for oil in Q1 2024 were $74.65 per barrel, while natural gas prices dropped to $1.96 per Mcf, reflecting a significant price variance impact [139]. - General and administrative expenses per Boe decreased to $1.06 in Q1 2024 from $1.68 in Q1 2023, attributed to increased production [142]. - Interest costs rose significantly to $36.0 million in Q1 2024 from $16.7 million in Q1 2023, primarily due to higher borrowings and interest rates [147]. - The company recorded an income tax benefit of $4.8 million in Q1 2024, contrasting with an income tax provision of $26.8 million in Q1 2023 [148]. Capital Expenditures and Investments - The company drilled, completed, and brought online 12 net wells in Q1 2024, with capital investments totaling $109 million [128]. - As of March 31, 2024, SilverBow's liquidity included $1.4 million in cash and $604 million available under its $1.2 billion Credit Facility, supporting a capital budget of $470 - $510 million for 2024 [130]. - SilverBow plans to operate three drilling rigs through May 2024, then reduce to two rigs, optimizing its drilling schedule based on commodity prices and returns on investment [129]. Expenses and Costs - Transportation and processing expenses on a per-Boe basis increased to $4.23 for Q1 2024 from $2.53 in Q1 2023, attributed to additional agreements from the 2023 acquisition [145]. - Severance and other taxes on a per-Boe basis decreased to $1.95 in Q1 2024 from $2.06 in Q1 2023, with a percentage of oil and gas sales at approximately 6.3% for Q1 2024 compared to 6.7% for Q1 2023 [146]. Debt and Interest Rate Exposure - As of March 31, 2024, the company had $1.1 billion drawn under its Credit Facility and Second Lien Notes, which are subject to interest rate fluctuations [154]. - A hypothetical one percentage point increase in interest rates would raise annual interest expenses by $11.0 million based on current borrowings [154]. Risk Management - The company is exposed to commodity pricing volatility, which affects realized prices for oil and natural gas production [150]. - The company maintains a price risk management policy utilizing financial instruments to mitigate price fluctuations in oil and natural gas [151]. - A significant portion of oil and gas sales is made to Kinder Morgan, Inc. and its affiliates, with expectations to continue this relationship [153]. Accounting and Controls - There were no changes in critical accounting policies or internal controls over financial reporting during the three months ended March 31, 2024 [149][157].