Chord Energy (US:CHRD)2021-11-04 19:08Financial Data and Key Metrics Changes - The company reported a net income of $198 million or $5 per diluted share for Q3 2021, compared to a loss of $61 million or $1.57 per share in the previous quarter [9] - Adjusted net income was $142 million or $3.57 per diluted share, up from $118 million or $3.01 per share in the previous quarter [10] - Adjusted EBITDAX increased to $201 million from $176 million in the previous quarter, primarily due to better commodity prices [11] Business Line Data and Key Metrics Changes - Total production averaged 92,100 barrels of oil equivalent (BOE) in Q3 2021, slightly down from 92,600 BOE in Q2 2021 [11] - Oil production averaged 51,800 barrels in Q3 2021, down from 53,400 barrels in Q2 2021 [12] - Capital expenditures (CapEx) were $67 million, with 17 gross/9.1 net wells brought into production [15] Market Data and Key Metrics Changes - Oil differentials have narrowed due to basin production levels remaining significantly behind total takeaway capacity [13] - The company expects full-year oil differentials to land within the low end of stated guidance [14] Company Strategy and Development Direction - The company aims to maintain a reinvestment rate of approximately 35% of EBITDA in 2022, similar to 2021 [18] - Plans for 2022 include additional operational activity and infrastructure build-out, particularly in the Sanish field [22] - The company is focused on pursuing acquisitions to enhance its competitive position in the Williston Basin [24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's financial position, expecting to exit 2021 with no debt and positive cash flow [8] - Inflationary costs are anticipated to be in the high single-digit to low double-digit percentage range, with efforts to secure contracts to mitigate these costs [21] - The company is optimistic about its ability to generate free cash flow and return capital to shareholders starting in Q1 2022 [24] Other Important Information - The company completed an acquisition of assets in North Dakota, expanding its inventory by over 60 gross locations [16] - The company is focused on improving safety, environmental controls, and governance [17] Q&A Session Summary Question: How does the company view the M&A market currently? - The company remains focused on opportunities in the Williston Basin, considering both small and large acquisitions [26] Question: What is the extent of oilfield servicing cost inflation? - Steel prices have increased significantly, and labor issues are a concern, but the company is working on securing contracts to manage costs [27][28] Question: What is the company's approach to shareholder returns? - The company is considering a balanced approach, including potential fixed dividends and share buybacks, while also investing in business growth [31] Question: Is the company looking for transformational deals or smaller acquisitions? - The company is open to both transformational and smaller bolt-on acquisitions that create value for shareholders [32] Question: Is there an update on guidance for the full year? - Management indicated that they are trending towards the high end of production measures and are satisfied with the current position [34]