Financial Data and Key Metrics Changes - In Q3 2024, the company reported production of 82,000 BOE per day, with 23% from oil, 53% from natural gas, and 24% from NGLs [19] - Average realized prices were $74.55 per barrel of oil, $1.73 per Mcf of gas, and $22.61 per barrel of NGLs, with total oil and gas revenues of $209 million [19] - The company generated adjusted EBITDA of $134 million and operating cash flow of $111 million, with free cash flow of $52 million after CapEx of $53 million [21] Business Line Data and Key Metrics Changes - The lease operating expense (LOE) for Q3 was $44 million or $5.85 per BOE, which is at the low end of guidance [20] - The company drilled and brought online 11 gross and nine net wells while running two rigs during the quarter [11] Market Data and Key Metrics Changes - Average prices realized in Q3 were $74.55 per barrel of oil, which is a 6% decrease from Q2 [10] - The company has hedged 50% of its next 12 months' production and 25% of the second 12 months to mitigate risks from falling prices [9] Company Strategy and Development Direction - The company focuses on maintaining financial strength with a long-term debt-to-EBITDA ratio of one or less, disciplined execution, and maximizing cash distributions [6][7] - The strategy includes acquiring cash-flowing assets at discounts and maintaining a reinvestment rate of less than 50% of operating cash flow [7][8] - The company plans to increase its rig count to three in 2025 and expand drilling into new locations [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to make acquisitions during periods of lower pricing due to low leverage [10] - The company anticipates that demand for energy will continue to grow, driven by global population and economic development [8] - Management noted an improving pipeline of deals and increased interest from sellers, which could lead to higher distributions per unit in the coming year [17] Other Important Information - The company completed a follow-on public offering generating proceeds of $129 million to fund acquisitions [16] - The company ended the quarter with $184 million in cash and an undrawn $75 million revolver [20] Q&A Session Summary Question: What is the 2025 plan for turn-in-lines? - Management indicated that the 2025 plan assumes turning on a little over 40 gross wells [22][24] Question: Is the 2025 program more smoothed out compared to 2024? - Management stated that the 2025 program is not set up to be lumpy, but it depends on pricing and the 50% reinvestment rate [24][26] Question: How is the early performance of the recent acquisitions? - The combined production from the recent acquisitions was about 5,000 BOE per day, which is not expected to significantly impact fourth-quarter guidance [35] Question: What is the outlook for refinancing the term loan? - Management is considering options for refinancing, including the robust RBL high-yield market, but timing and covenants will play a role in the decision [50][52] Question: What are the thoughts on deeper Mississippi wells? - Management expressed confidence in the rate of return from deeper Mississippi wells, indicating they are highly competitive [48]
Mach Natural Resources LP(MNR) - 2024 Q3 - Earnings Call Transcript