HighPeak Energy(US:HPK)2021-05-18 19:12Financial Data and Key Metrics Changes - The company reported a profit with over $20 million of EBITDAX in Q1 2021, which is a significant success compared to previous periods [10] - Average production in the quarter was almost 5,300 barrels a day, with a current production rate of 8,300 barrels a day, representing a 150% growth from the end of Q1 to mid-May [6][12] - EBITDAX increased by 187%, projecting over $200 million on an annual basis by year-end [12] - The company maintains zero debt and has $9.6 million cash on hand [10] Business Line Data and Key Metrics Changes - The company has 28 producing wells and 11 additional wells being drilled, contributing to the production growth [7] - The average lateral length drilled increased from 9,300 feet to approximately 14,000 feet, enhancing drilling efficiency [13] - Lease operating expenses decreased by 28% quarter-over-quarter, and cash G&A expenses fell by 42% [14][22] Market Data and Key Metrics Changes - The company operates with a 90% oil cut, which is significantly higher than many peers, driving higher revenue per unit [21] - Realized pricing was reported at $54 per BOE, with a cash margin of $42.14 per BOE, one of the highest in the industry [15][22] Company Strategy and Development Direction - The company is focused on fiscally responsible production growth and high operating margins, with a commitment to low leverage and maintaining a strong balance sheet [8][30] - There is an emphasis on capital efficiency and operational excellence, with plans to continue drilling and completing wells while managing costs effectively [19][20] - The company is exploring consolidation opportunities but remains selective, ensuring any acquisitions are accretive [36][38] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth trajectory, citing unprecedented production increases and operational efficiency despite inflationary pressures [6][19] - The company is optimistic about future developments, particularly in the Signal Peak area, where new wells are showing promising results [31][43] Other Important Information - The company has established an ESG committee and is actively working on sustainability initiatives, including reducing emissions and improving operational efficiency [26][27] - The Phase 1 water system is fully operational, which will help lower lease operating expenses and improve overall efficiency [10][25] Q&A Session Summary Question: Can you talk about consolidation opportunities in Howard County? - Management indicated they are evaluating consolidation opportunities but will be selective to ensure any acquisitions are accretive [36][38] Question: Can you discuss the drivers of the significant progress in LOE? - Management highlighted the efficiency of the company-owned water system and plans to upgrade electrical systems to reduce costs further [39][40] Question: What are the plans for additional wells at Signal Peak? - Management confirmed that infrastructure is in place for early development, with plans for future upgrades as drilling progresses [43]