REPX(REPX)2023-03-09 19:13Financial Data and Key Metrics Changes - Total revenue for the fourth quarter was approximately $64 million, which is 10% lower than the third quarter, primarily due to a 13% decrease in realized oil prices, partially offset by higher production and lower derivative settlements [14][18] - Cash flow from operations before changes in working capital decreased from $50 million to $44 million, representing a 12% decrease quarter-over-quarter [15] - For the full year, cash flow from operations before working capital increased by 89% year-over-year from $89 million to $169 million, driven by higher volumes and prices [16][41] Business Line Data and Key Metrics Changes - Production grew from 12.7 to 13.3 MBoe per day in the fourth quarter, a 4% increase quarter-over-quarter, and year-over-year average production increased from 9.2 to 11.5 MBoe per day, a 25% increase [5][41] - Lease operating expenses for the fourth quarter were $8.8 million or $7.16 per BOE, representing a 5% decrease quarter-over-quarter and a 5% increase year-over-year [6] Market Data and Key Metrics Changes - The company anticipates starting operations on the Pecos assets in mid-April, with new production expected by early to mid-summer [4] - The acquisition of Pecos Oil & Gas assets is expected to enhance production and diversify the company's portfolio, reducing single area concentration risk [9] Company Strategy and Development Direction - The company is focused on driving profitable growth and investing in long-term initiatives, including the acquisition of new assets and the development of on-site power generation [10][40] - The joint venture for on-site power generation aims to improve control over energy costs and reduce carbon emissions [10] Management's Comments on Operating Environment and Future Outlook - Management noted that inflationary pressures are being observed, but there are signs of prices starting to come down, which could lead to improved efficiencies [28] - The company is working on a large-scale storage hub project for CO2, indicating a commitment to advancing environmental initiatives [31] Other Important Information - The company paid $25 million in dividends during the year, corresponding to 44% of free cash flow, and has paid dividends for 16 consecutive quarters [42][43] - The first phase of the power generation project is expected to be operational by June 2023, providing 10 megawatts of power [10] Q&A Session Summary Question: Thoughts on Pecos assets and competition - Management anticipates starting operations in mid-April and bringing on new production by early to mid-summer [4] Question: Inflation costs and mitigation - Management noted that prices may be starting to come down, which could help drive efficiencies [28] Question: Update on CCUS project - The company is working with partners on a large-scale storage hub project, focusing on efficiency and shareholder capital [31] Question: Infrastructure issues with Yeso assets - There are no anticipated large infrastructure CapEx needs, as existing infrastructure is in place [57] Question: Flexibility with midstream contracts - Management indicated that there is flexibility with midstream contracts to maximize economics [61] Question: Impact of power project on operating efficiency - The power project aims to improve operational quality and reduce costs associated with fluctuating power quality [62] Question: Hedging positions for oil - The company has established hedge positions to protect cash flows, especially with the new acquisition [86]