REPX(US:REPX)2023-11-11 16:57Financial Data and Key Metrics Changes - In Q3 2023, the company reported average oil production of 14,000 barrels per day and 19,900 barrels of oil equivalent per day, generating $72 million of adjusted EBITDAX, $53 million of operating cash flow, and $31 million of free cash flow [44] - Operating cash flow before changes in working capital increased by 22% quarter-over-quarter to $63 million, driven by a $10 increase in oil prices, which offset a 1,000 barrel per day production decline [8] - Lease operating expenses were $9.21 per BOE, within the guidance of $8.50 to $9.50 per BOE for the quarter [6] Business Line Data and Key Metrics Changes - The company drilled three net operated horizontal wells, completed 4.7 net operated wells, and turned to sales 5.7 net operated wells during the quarter [53] - Capital expenditures (CapEx) declined by 24% on an accrual basis and by 35% on a cash basis, primarily due to a planned slowdown in activity following a very active first half of 2023 [23] Market Data and Key Metrics Changes - Realized oil prices increased by 13%, while realized natural gas prices rose to $0.58 from $0.02 in the previous quarter, and realized NGL prices increased by nearly 60% [8] - The company anticipates that the reinvestment rate could fall below 70% for the full year, with a current reinvestment rate of 50% for the quarter [23] Company Strategy and Development Direction - The company remains focused on strategic growth, operational efficiency, and returning capital to shareholders while reducing debt taken on to acquire New Mexico properties [50] - The company is evaluating alternative options to optimize and secure long-term sustainable midstream capacity and is in the final phases of commissioning Phase 1 of on-site power generation [52] Management's Comments on Operating Environment and Future Outlook - Management noted that substantial production contributions for the current year are not anticipated, but a drilling program has commenced, expecting to complete three net wells in Q4 [7] - The company is optimistic about the fourth quarter free cash flow despite modestly lower production and lower prices, with a forecast of good free cash flow [24] Other Important Information - The company reduced debt by $10 million quarter-over-quarter and paid dividends of $0.34 per share in Q3, totaling approximately $6.8 million [44] - A cash dividend of $0.36 per share was declared after the end of the quarter, representing a 6% increase [44] Q&A Session Summary Question: Are you seeing more opportunities to add assets on the Texas side or New Mexico? - Management indicated that there are multiple sizes of opportunities, including both large packages and smaller bite-size assets [59] Question: What are your thoughts on the hedging environment right now? - Management stated that they aim to protect downside while retaining some upside, emphasizing that a small increase in asset value has a disproportionately large impact on equity value [61]