HighPeak Energy(HPK)2024-11-05 21:33Financial Data and Key Metrics Changes - HighPeak Energy reported a production average of over 51,000 barrels of oil per day in Q3 2024, exceeding previous quarter averages [11][12] - The company achieved positive free cash flow for the fifth consecutive quarter and utilized a significant portion to pay down debt and execute a share buyback program [9][10] - The EBITDAX per BOE for Q3 was $45.68, which is over 65% higher than the peer group average [23][24] Business Line Data and Key Metrics Changes - The drilling program has continued to deliver strong well results, leading to an increase in production guidance for the full year 2024 to a range of 48,000 to 51,000 BOEs per day, a 10% increase from the initial guidance [16][17] - The company has identified approximately 300 Middle Spraberry locations across its acreage, with the Kallus well achieving a Max Oil IP of roughly 1,500 barrels of oil per day [26][29] Market Data and Key Metrics Changes - HighPeak's operations were impacted by a major storm in September, which caused some production volumes to be offline, but the overall impact was minimal due to the robustness of the infrastructure [12][25] - The company continues to maintain a competitive cost structure, with drilling and completion costs running 9% below Q1 levels [34] Company Strategy and Development Direction - HighPeak is focused on maximizing shareholder value through disciplined operations, strengthening the balance sheet, and optimizing production [7][10] - The company is expanding its infrastructure to support life-of-field development and maintain peer-leading profit margins [48][80] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the continued strong performance of wells and the potential for significant resource recovery, estimating upwards of 1 billion barrels of oil equivalents of net recoverable resource in place [80] - The company remains optimistic about achieving further cost savings and operational efficiencies [17][19] Other Important Information - HighPeak's ESG initiatives are integrated into operational and strategic planning, including the use of recycled stimulation fluid and a solar farm that reduces CO2 emissions [41][42] Q&A Session Summary Question: Plans for offsetting the Kallus well - Management indicated plans to delineate and offset the Kallus well in the future, likely within the next quarter or two [50][53] Question: Performance of the Judith well and expansion confidence - Management confirmed strong early performance from the Judith well and expressed confidence in the overall inventory across the acreage [56][58] Question: Data from log penetrations and de-risking locations - Management highlighted the consistency of performance across wells and the importance of commercial viability in assessing inventory [63][64] Question: Cost differences versus the central Midland Basin - Management explained that the eastern side of the basin is shallower, leading to lower drilling costs compared to deeper areas [73][74] Question: Opportunities for acquiring additional acreage - Management stated that the land department is actively seeking to acquire additional acreage around successful wells [76][77]