REPX(REPX)2025-03-06 19:07Financial Data and Key Metrics Changes - In 2024, the company achieved a 15% increase in oil production and a 22% increase in total production, while upstream cash capital expenditures declined by 27% [6][7] - Upstream free cash flow allocation in 2024 included 38% for growth initiatives, 38% for debt reduction, and 24% for dividends, resulting in a 8.66, with clean-out costs down 16% year-over-year [17][18] Business Line Data and Key Metrics Changes - The company drilled 30 wells, completed 20, and turned in line 22 gross operated wells in 2024, with a 20% increase in lateral feet drilled per day [11][12] - Net production grew from 4.8 million to 5.52 million barrels of oil year-over-year, while equivalent production increased from 6.79 million to 8.25 million barrels of oil equivalent [14][15] Market Data and Key Metrics Changes - The company captured and sold more produced gas in Texas, resulting in a lower percentage of oil in the overall production mix [15] - The company plans to shift more development activity to New Mexico, where significant long-term growth potential is anticipated [7][8] Company Strategy and Development Direction - The company aims to build complementary assets across upstream, midstream, and power sectors, focusing on capital efficiency and strategic infrastructure investments [33][36] - A 15-year gas purchase agreement and plans for a high-pressure natural gas pipeline capable of transporting up to 150 million cubic feet per day were announced [8][9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the capital efficiency of the asset base and the ability to generate positive free cash flow, with a production growth forecast of 9% to 14% for 2025 [26][27] - The company is exploring opportunities in the ERCOT market and assessing the potential for battery generation as part of its power strategy [41][43] Other Important Information - The company achieved a total recordable incident rate of zero for 2024, demonstrating a strong commitment to safety [11] - The initial construction phases of the New Mexico gathering and compression project are underway, with commissioning expected soon [19][20] Q&A Session Summary Question: Inquiry about the power side and potential upside - Management discussed the progress of the ERCOT project and the potential for battery generation, noting the current market dynamics and pricing trends [40][41] Question: Focus on the New Mexico Gas Midstream project - Management explained the decision to build the midstream project in response to limited takeaway capacity in the region, emphasizing the long-term benefits of the infrastructure [50][52] Question: Discussion on D&C cost per foot and 2025 plans - Management confirmed a continued improvement in D&C costs, with a focus on strategic drilling locations and infrastructure readiness for 2025 [55][57] Question: Update on ERCOT efforts and deal status - Management provided insights into ongoing negotiations and the potential for future deals in the ERCOT market, highlighting the importance of gas reserves [68][70] Question: Service availability and cost pressures - Management indicated that service availability is stable, with slight improvements in drilling costs due to market consolidation [75][76] Question: Timing of midstream projects and financial impacts - Management outlined the expected timeline for midstream project completion and its potential financial benefits, including midstream revenue and operational efficiencies [84][88]