HighPeak Energy(US:HPK)2023-03-07 20:10Financial Data and Key Metrics Changes - The company reported an average production of 37,300 barrels per day, representing a 42% increase from the third quarter and a 150% increase compared to the fourth quarter of the previous year [7] - Crude reserves increased by 92% year-over-year to 123 million barrels of oil [8] - The company is projecting an EBITDA run rate of over $1.5 billion at reasonable oil prices by the end of the year [10] - General and administrative expenses were slightly higher due to year-end bonuses but are expected to decrease as production volumes increase [12] Business Line Data and Key Metrics Changes - The company has expanded its acreage position from 61,000 acres at the end of 2021 to over 112,000 acres [4] - The production from the Signal Peak area has been a significant contributor to the overall production growth [5] - The company has been focusing on operational efficiency, with improvements in well performance and cost reductions [6] Market Data and Key Metrics Changes - The company anticipates generating free cash flow in the second half of the year, contingent on oil prices remaining favorable [26] - The average peer company would need to produce about 60,000 BOEs per day to achieve similar cash flow results that HighPeak achieves with 40,000 BOEs per day [11] Company Strategy and Development Direction - The company is focused on optimizing shareholder value and maintaining a healthy balance sheet while navigating supply chain disruptions [23] - HighPeak is pursuing strategic alternatives, including potential mergers or sales, to enhance shareholder value [39] - The company plans to reduce its rig count from six to four to maintain a strong balance sheet while still achieving production growth [58] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to continue improving production and cash flow despite market volatility [28] - The company is positioned to achieve free cash flow at a breakeven oil price as low as $45, which is unprecedented in the industry [37] - Management emphasized the importance of maintaining a conservative approach to reserve bookings while still achieving significant growth [54] Other Important Information - The company has a 130% compounded annual growth rate of proved reserves over the last two years [16] - HighPeak's operational and environmental initiatives are designed to be both financially and environmentally rewarding for shareholders [13] Q&A Session Summary Question: Are the wells mentioned in the press release related to the Conrad and Griffin pads? - Yes, the wells are from the western part to the eastern part of the Conrad and Griffin wells [62] Question: Are any of the results from the pads additive to the inventory counts? - All locations are included in the inventory mix, and as these wells are developed, they will move up into the primary numbers [67] Question: How does the recovery factor on Flat Top compare to other areas? - There is about a 2% difference in recovery factors between the eastern and western parts of Howard County, with the eastern area outperforming [68] Question: What is the company's approach to reserve bookings? - The company maintains a conservative approach to reserve bookings, allowing for potential future growth in recoverable reserves [69] Question: How does the company plan to manage its drilling program in the future? - The company has the flexibility to adjust its drilling program based on market conditions and does not have long-term contracts that could hinder its operations [60]