REPX(US:REPX)2023-05-13 03:56Financial Data and Key Metrics Changes - For Q1 2023, the company reported net income of $32 million or $1.60 per diluted share, and adjusted net income of $25 million or $1.26 per diluted share [17] - Adjusted EBITDAX for the quarter was $44 million, up by $9 million or 26% year-over-year, but down approximately $2 million or 5% quarter-over-quarter [17] - Operating cash flow was $33 million or $37 million before working capital changes, which is up by $7 million or 23% year-over-year [50] Business Line Data and Key Metrics Changes - The company turned to sales 7 gross and 5.3 net wells during the quarter, significantly higher than the 1 gross and 1 net well turned to sales in Q4 2022 [30] - Lease operating expenses (LOE) on a unit of production basis were slightly lower year-over-year, reflecting cost control efforts [5] - Accrual base CapEx was $42 million and cash CapEx was $35 million, resulting in free cash flow of just over $2 million [18] Market Data and Key Metrics Changes - The company anticipates oil production to average 14,000 to 15,000 barrels per day and total equivalent production to average 20,000 to 21,000 barrels of oil equivalent per day in Q2 2023 [38] - The macro environment has been volatile, influenced by Fed-induced monetary tightening and weak gas and NGL pricing [37] Company Strategy and Development Direction - The company announced a joint venture to construct new power infrastructure for on-site generation using produced gas, aligning with sustainable practices [2] - The New Mexico acquisition is seen as a major milestone for long-term growth and value creation [46] - The company plans to focus on reinvestment or volume growth for discretionary cash flow, with a balance available for debt paydown and dividends [51] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about production increases in Q2 relative to both Q4 2022 and Q1 2023, driven by the New Mexico acquisition and continued development of core assets [47] - The company remains flexible to slow down spending based on commodity prices and will evaluate options with the management team and Board [37] Other Important Information - The company plans to continue paying its quarterly dividend, which represents a significant amount of excess free cash flow [52] - The integration of the New Mexico asset is ongoing, with plans to complete the transition during the current quarter [41] Q&A Session Summary Question: Integration of new assets and insights gained - Management is working through a transition period with the previous operator and intends to complete the integration during the current quarter [41] Question: Plans for the Enhanced Oil Recovery (EOR) project - The company is continuing to inject and refresh the reservoir, with plans for reinjection using compressors expected to come online soon [23][24]