REPX(US:REPX)2022-05-15 11:16Financial Data and Key Metrics Changes - The company reported a net loss of $7 million for the quarter, primarily due to a $49.6 million loss in derivatives, which included $18 million of realized derivative settlements and $32 million of unrealized loss [21] - Adjusted EBITDAX for the quarter was $34.4 million, with a cash margin per barrel of oil equivalent (Boe) increasing 28% quarter-over-quarter to $59 before derivatives and 34% to $38 after derivatives [23][21] - Operating cash flow for the quarter was $30 million, and free cash flow was $20 million [24] Business Line Data and Key Metrics Changes - Average oil production was 7,497 barrels per day, representing a 3% quarter-over-quarter growth and a 24% year-over-year increase [14] - Total equivalent production averaged 9,791 barrels of oil equivalent per day, which was a 2% quarter-over-quarter decrease but an 18% year-over-year increase [14] - The company completed three gross, three net horizontal wells during the quarter, with additional wells planned for the fiscal third quarter [16] Market Data and Key Metrics Changes - Average realized oil price improved 22% quarter-over-quarter to $92.44, with a net realized price after derivatives of $66.60, which was 23% higher than the prior quarter [25] - The net realized price for natural gas declined by 18% quarter-over-quarter, with an index price of $4.66 [26] - The market price for NGLs was $44, approximately $4 less than the prior quarter, with gathering processing fees around $17 per barrel [27] Company Strategy and Development Direction - The company is focused on increasing production and activity, with plans to drill five gross, five net wells in the fiscal third quarter [40] - The company aims to allocate more capital to growth, believing it can achieve production growth even in a challenging environment [35] - The company is advancing its EOR pilot project, with expectations to begin CO2 injection in the fourth quarter of 2022 [44][45] Management's Comments on Operating Environment and Future Outlook - Management acknowledged inflationary pressures in labor, materials, and equipment markets, but expressed confidence in managing these challenges [7][48] - The company remains focused on disciplined low-leverage production growth and returning capital to shareholders through dividends [48] - Management is optimistic about the potential for increased production volumes following the completion of midstream expansion projects [41] Other Important Information - The company amended its credit facility to extend maturity to April 2026 and increased its borrowing base by 14% to $200 million [12] - The company has secured drilling rigs and casing for 100% of its fiscal 2022 development activity and for up to 14 wells planned for fiscal year 2023 [8] Q&A Session Summary Question: Growth expectations and rig availability - Management confirmed that the current rig will stay through mid-May, with plans to drill an additional well in early July and resume a more active program in September or October [51] Question: Pipeline logistics and constraints - Management stated that the pipeline expansion is on target, and production volumes are expected to increase as commissioning progresses [57] Question: EOR project timeline - Management indicated that additional injection wells will be brought online throughout the quarter, with expectations to have them all operational by July [58] Question: CCUS team and project updates - Management confirmed the hiring of a team from the CO2 industry to optimize CO2 injection and explore opportunities in the CCUS space [60] Question: EOR CapEx and inflation impact - Management noted that a large portion of EOR CapEx was secured before recent inflationary pressures, providing some insulation from current market conditions [68] Question: Market activity and asset sales - Management observed increased marketing of assets due to higher oil prices, with a mix of buyers looking to capitalize on improved economic conditions [73]