HighPeak Energy(HPK)2025-03-11 21:07Financial Data and Key Metrics Changes - HighPeak Energy achieved a 10% increase in production year over year, surpassing initial expectations of flat production volumes [8] - The value of proved reserves increased by 17% compared to the prior year, despite lower SEC guideline commodity prices [15] - Absolute debt was reduced by 30 million planned for repayment at the end of March 2025 [10][11] Business Line Data and Key Metrics Changes - The company reported an average production of over 50,000 BOEs per day in Q4 2024, with a strong start in Q1 2025 averaging over 52,000 barrels per day [14] - Lease operating expenses decreased by 17% on a BOE basis, reflecting improved operational efficiency [10] Market Data and Key Metrics Changes - HighPeak's proved reserves increased by almost 30% year-over-year, with a notable 36% increase in proved developed reserves [9][18] - The company reported a reserve replacement ratio of 345%, indicating strong performance despite lower SEC pricing [20] Company Strategy and Development Direction - The company plans to maintain capital discipline and focus on improving corporate efficiency, with a capital budget approximately 20% lower than in 2024 [12][34] - HighPeak aims to continue its two-rig development program while strategically delineating the Middle Spraberry zone [28][29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's financial position, highlighting the transition to a more traditional capital structure to reduce cash interest expenses [38][39] - The company anticipates continued improvements in well performance and operational efficiency, positioning itself for sustainable long-term success [41][42] Other Important Information - HighPeak has added 30,000 net acres to its position over the past 15 months, with ongoing infrastructure projects to connect new areas to its core systems [31][32] - The company has layered on additional gas hedges to enhance its financial position, although gas will not be a significant part of its production mix [61] Q&A Session Summary Question: How many middle Spraberry wells are you planning for 2025? - The company plans to drill two to three additional middle Spraberry wells in 2025, focusing primarily on the Flat Top area [50][52] Question: Does the infrastructure improvement impact your ability to move more oil barrels? - Yes, the infrastructure improvements enhance flexibility in handling gas volumes, which indirectly supports oil production by capturing and selling gas [58][60] Question: How does the infrastructure build-out support corporate efficiency goals? - The infrastructure supports operational efficiency by reducing both OpEx and CapEx, allowing for better control over drilling and completion costs [64][66] Question: How do you weigh the merits of reducing debt versus buying back shares? - The company is focused on optimizing its capital structure, which could lead to significant cash flow improvements and flexibility in managing debt and share buybacks [75][78]