Financial Data and Key Metrics Changes - High Peak Energy reported an average production of over 53,000 BOEs per day, a 6% increase compared to Q4 [6] - The company generated nearly $200 million in EBITDA during the quarter, reflecting a 10% increase from the previous quarter [6] - Cash margins remained healthy, supported by a 3% decrease in lease operating expenses quarter over quarter [7] Business Line Data and Key Metrics Changes - The drilling team spud 20 wells during the quarter, exceeding the initial plan of 12 wells, and rig released 16 wells [9] - The average spud to spud timing improved from 14 days to about 11 days, translating to a single rig drilling over 30 wells per year [8] Market Data and Key Metrics Changes - The company is experiencing a 3% increase in costs for tubular goods due to tariffs, which could raise overall AFE by approximately 2% [16] - Despite the tariff impact, overall well costs are seeing low single-digit declines [18] Company Strategy and Development Direction - High Peak is narrowing its production guidance and raising the bottom end due to strong Q1 performance [8] - The company plans to drop one of its two rigs for four months to manage operational DUCs and maintain capital discipline [13][14] - High Peak is implementing simul frac operations to enhance efficiency and reduce costs further [18] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding the current market environment and indicated flexibility to adjust development plans based on market conditions [14][15] - The company remains in a healthy financial position with no near-term debt maturities and is focused on optimizing its capital structure [27][28] Other Important Information - High Peak's reserve replacement ratio over the past three years is 400%, primarily driven by organic growth [20] - The company has a long runway of high-value drilling locations, which is becoming increasingly scarce in the industry [28] Q&A Session Summary Question: Impact of simul frac on costs - Management explained that simul frac could reduce completion time from 25-28 days to 11-14 days, resulting in approximately $1 million savings for a four-well pad [33][34][37] Question: Update on well results in Borden County - Management reported that eight wells in Borden County are performing well, with new wells showing a 20% improvement in production compared to the previous year [40][41] Question: Economic development locations with Middle Spraberry - Management indicated that they have about 200 Middle Spraberry wells in inventory, with expectations to move many into the sub $50 breakeven category over the next year [46][47] Question: Impact of 2025 development plan changes on 2026 - Management noted that maintaining efficiency gains will depend on working closely with vendor partners and market conditions [48][49] Question: Production guidance adjustments - Management confirmed that the raised production guidance is primarily due to strong Q1 performance and efficiencies, with expectations for continued strong production in 2025 [51][52] Question: Balance sheet recapitalization goals - Management emphasized the importance of optimizing capital structure and the potential for significant free cash flow generation in the coming years [56][59]