Chord Energy (CHRD)2023-08-03 18:58Financial Data and Key Metrics Changes - The company generated 11 million of capital from non-operated wellbores sold [62] - Production taxes were reported at 8.4% of oil and gas revenue, which was at the higher end of the guidance range [2] - The company returned approximately 198 million via share buybacks over the past 12 months [60] Business Line Data and Key Metrics Changes - Oil volumes were strong in the second quarter, exceeding midpoint guidance by about 1.5%, while total volumes were above the high end of guidance driven by NGL volumes [95] - The company has seen improvements in well delivery and performance from new wells, particularly with the three-mile laterals [87][90] - The three-mile lateral program is expected to continue, with the company assuming a 40% uplift in estimated ultimate recovery (EUR) for these wells [64] Market Data and Key Metrics Changes - NGL realizations were impacted by lower Conway prices and higher gathering and processing fees, but are expected to improve as prices recover [72] - The company noted that oil continues to become a larger portion of revenue, which is taxed at a higher rate than gas and NGLs [73] Company Strategy and Development Direction - The company is focused on disciplined capital allocation, efficient operations, and maintaining a strong balance sheet while committing to responsible operations [14] - The integration of two premier Williston Basin operators has strengthened the organization, allowing for improved financial and operational synergies [59][84] - The company aims to maintain a capital-efficient program, particularly in the Bakken region, to drive superior returns for shareholders [3] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery of gas prices and the potential for improved realizations as market conditions stabilize [2][72] - The company plans to provide a maintenance-level capital plan for 2024, focusing on capital efficiency [78] - Management highlighted the importance of infrastructure in supporting drilling activities and minimizing constraints in new areas [45][47] Other Important Information - The company expects to publish its first sustainability report as a combined entity in the third quarter, emphasizing its commitment to safety and emissions improvement [69] - The full-year capital budget guidance was increased by about $20 million at the midpoint, reflecting higher fourth-quarter frac activity associated with the XTO acquisition [109] Q&A Session Summary Question: Can you provide more details on cleaning out the three-mile wells? - Management indicated that while there may be times when not 100% of the well is cleaned out, spending additional time to ensure complete cleaning can significantly enhance production contributions from the well [99][112] Question: What are the implications of the tracer data on recovery assumptions? - Management noted that if the early results align with expectations, there is potential to increase recovery assumptions for the last mile of the lateral closer to 100% [116] Question: How is the company addressing potential constraints in new drilling areas? - Management assured that infrastructure planning is in place to avoid significant constraints as drilling expands into new areas [45][47]