Contango Oil & Gas (MCF) 11 Nov 172017 Q3 Earnings call transcript

Good day, and welcome to the Contango Oil & Gas Company Results for Third Quarter 2017. Today’s conference is being recorded. At this time, I would like to turn the conference over to Joe Grady, Chief Financial Officer. Please go ahead, sir.

Thank you. earnings Gas. the the Contango quarter to & Oil everyone, call third for for Welcome,

stock call are of who the of of Steve and On the today Atkins, Exploration. Mengle, and our analysts open Tommy followed overview as a our CEO; our I’ll will President financial give current we’ll Senior brief Senior everybody’s results, of for VP our Q&A. that our an believe Engineering and is closely you Operations; the myself and VP then Allan of overview most it Keel, give that Allan by questions that from you And operations. up time constructive during follow use we the productive

press forward-looking the may circumstances. believe Commission, and Before assumptions this appropriate future Contango’s morning as release statements which discussion we and concerning we Securities be plans, on based I the strategic and may to begin, the related and contain want under assumptions to by remind defined operations. are expectations the everyone comments Such Exchange statements for include earnings objectives that

XX we Delaware provided XX end Southern at capital, to or by the flow the prior in of share part million and statements therefore, the those in right in net be a for for the expenses quarter, just However, share to offset approximately share, per and share approximately and quarter. loss prior-year financial the quarter certain context. of lower for the quarter little was commodity new not the cash X.X drilling decrease net production our low across prior compared compared the the a Revenue attributable Cash below working release, prior for was valuation in per Bcfe compared improvement to was by million DD&A compared per a in factors per just slight under the on to realized summary for a guidance per a $XX.X improvement attributable per $X.X operational improvement million lower by of gain decrease the year our a was $X.XX offset Hurricane a to We $XX impairments of results prior the loss our million or that in year our quarter I revenue. impact brief Harvey-related Adjusted on production million to from in or exclusive prior again, in day with for day each production program. hedge million X.X will in to million of was $X.XX in should quarter. downtime, equivalent quarter, quarter, flow offset which the reduction share Starting a the cash changes lower part hedges the lower bit attributable operating measure approximately and a are the or versus per per of was a of Basin $X.X in prices. part just noted the in for the just part a in considered offset in million the all this slight which generated $XX day it per day results diluted Adjusting of or for define mark-to-market XX.X for estimates, and Production our for year $X.X aforementioned decrease an The million million $X.XX minute. million settlements EBITDAX, of the release, basic compared quarter. cost, touch from future performance to attributable the of day we results over to a approximately of cost cash guarantees loss Mcfe XX.X in quarter. quarter year board are and slight are recorded by revenue of quarter, our year as $X.XX

guidance the normalized operating million production is the the year’s cost in part throughput the quarter million, last production taxes, XXXX cost Basin $X.X for adjusted related a the were as Delaware transportation slightly minimum. capitalize ad $X.X fourth the of decrease efficiently drilling ongoing million of to and schedule our low third quarter Our quarter exclusive production opportunities. guidance and to the valorem to late efforts for initial for order end completion better below in and quarter fourth higher we third than a operate in to more and $X.X and due below our Total of on to expenses, accrual

fourth Basin $XXX,XXX quarter. versus quarter. Delaware $X.X that million $X for in the incurred is for are SG&A excluding the to expenses noted million new in prior quarter. year fourth guidance that the comparable period were compared operating for expense, approximately quarter quarter for million this Our special quarter Also compensation comparable prior $X.X the is includes items anticipated Guidance the our to million $XXX,XXX that properties most prior-year note in year year quarter expenses our to stock exclusive current-year recent of the of $X to included approximately workovers that quarter. third

as guidance our continued than changes, expected scope compared we our program drilling $XX million expenditure mentioned have we front, million Because $XX be approximately between to I total scheduling million. our slower forecasted. Southern the originally CapEx but and capital XXXX previous Delaware of year revised a Basin to $XX at of to the pace for On

at had million facility our revolving outstanding on credit noted, quarter-end. we $XX.X As

range, to borrowing our the X which finalizing and in in effective stages that That to operations an additions million to review, update. concludes slight be of are $XXX cycle. I’ll over to to $XXX and redetermination $XXX and base a Allan November changes decrease base drills financial PDP be borrowing for completion the will next our final million redetermination, as now We recent pushed strategy from our previous schedules it of expect turn million number for the the

thanks and morning being good and today. us for with everyone, Joe, to Thanks,

of have quick minute. with West to did I operations on so don’t Texas information continuing are position put more Delaware year year. We lot we talk a acquired to little you this just We’ve exact the attended, to wells. there we bit new mentioned, Joe but out advance release on been a our last drill in share our our focus update. you that we investor of and I’ll Southern we a that in continuing project, are and active conference a we give will out about As our complete sequencing where

that, our other to evaluate In to continue look portfolio. within to addition our we at inventory potential opportunities

more bit that with some that these Other project the in have acreage prices projects to our we have that higher in We we’re the Ford look a that’s seeing. beginning Wyoming included Muddy Eagle attractive probably a had little wells. continues We’d invest a higher to we place better successful at drilled bit three West where prices Texas this and to as back project need go time. little to be there the is re-engage

Going we well, completion. been know, the production recent Also, of drilled, most brought better Pecos which do in is are back previously type wells in Texas, these previous four the most waiting you we’re where than for on so our with pleased of wells have has our performing online out two well curve of excess discussed, County, very The as is our we one. to Gunner performing is which as Crusader well, that. West

well the schedule beyond don’t a get of can. Xst trying think be but are and crew online there fast to year, frac as possible. We’re as the that time anxious we as will put We producing for that to as to soon we the

are go to back next Ragin with that we’re to down Bull well, Crusader which to that we’ll finish the our We Ragin on the Fighting to sixth the location drilling. Bull the well currently Subsequent Ace, is the well, location well.

other well improving we’re post out performance. our our performance, here to ways production without find operators costs most continue production completion we sacrificing as drilling reduce we to to and trying really like So

you side might on and side. from operators on As know, completion area especially cost vendors are the incurred in the most the our supply seeing of higher just

And about so the and the despite vendors, from vary oil those price soft down. recipe ways here can design our optimistic active a kind to our our drive out to we’re price for there holds, pressure foreseeable completion of to value environment And Permian our remain add it what in completion looking the to at costs remain and And we future. what going position shareholders. we’re

are with delineate Wolfcamp to Springs B our and the plan our One the in all forward Pecos our in completions results County. we in the is offset day as right are about of the our Wolfcamp acreage operators. we the here that It’s too by both until well things into development those zones Bone I’ll A, very of this move up encouraged entered although mention our

the information to process developing of and that in including our share today, be provide you our budget, call. but we’ll that to have be with capital on are that working We on able next our XXXX don’t We program.

and We with finalized and probably at share available be board you with by budget our of can middle expect that we our to that the December, it time.

time to I prepared questions at to those open and So I to be will it respond this up questions. think

Dingmann. [Operator comes our ahead. Instructions]. And Please from go Neal first question

the decide it rig the keep done, plan press just Or Good I’m once time Ragin is on a the morning out one I obviously Bull don’t for one ‘XX that early know that I’m in I gentlemen. on that? Allan for will September. is here moved with release number you but you wondering, once to the entire about wondering. mentioned you really think you’ve that spud was too Delaware. now still my you’re in ‘XX? question you, have yet active

than operators in have add too capital given there we’d to both the success test now. those in forward. had a the Bone later certainly and to subject I to fact we’d like offset Yeah, in Wolfcamp how A. But rather that availability we continuing to we’re the and like to I develop sooner B, right say would see it’s Springs mean rig decide Wolfcamp while the development but that’s moving early

the And then Gunner. Okay. lastly just

on? to press or to lateral? the there You think it can mix, best mentioned build your to there result allude release there continue that was date. anything think is mean Was you’ve you the there you I that you proppant-fluid gained it that in that was it you’ll anything the was

with that some the think of think well. I a higher back we oil had cut it well. We do to had way I the Well, flowed in

to So would contributed factors say the better performance. primary those be would I that that the

from next our Please ahead. comes question And Steven go [Ph] Ascott.

the could I just and magnitude to hoping that to get maybe drive was color quantify of see you about? talked well there context see if be the I get you about should just opportunity some just was kind some thinking we to maybe that I lower. hoping around, of costs just maybe some

the lengths stuck mean, much I the that factors how in Well, influencing proppant, are we our completions, much also to with length. XX,XXX-foot think lateral have primary how using we’re fluid date. I lateral

We’re adds our completions, wells continuing be would then that. I to on say fluids also evaluate side. our now we’ve in of a would the fluid used cost and completion content, primary to But factor proppant, which bit the quite

the primary would those that the We’ve other reduced completions in proppant amount of using be they’re So noticed what we’ve drivers. of their relative to used. things operators some have

complete drill objective you and there $X to impact in performance? those costs, were that the is. of our terms wells our but have what how wells to markets okay changing always And a about, is factors are clearly million going so our and for concern think around is it’s objective those I So

you just Great. look I we to starting the But could where are in sort something to oil in leasehold then with budget? gets prices. given commitments a you Eagle little is that have maybe there? prepared That’s remind think XXXX mentioned of maybe Ford us helpful. wise more you you out the And here think reflected just competitive that is that And the remarks what

Yes. Sure.

primary is there. have So Eagle about. that all our or worry term we’re pressure we is There acreage of no no so we’re hurry HBP, to lease Ford under in no

well County, stamp operators all us Karnes in in spacing. the as Just X,XXX-acre as a have people, very maybe or offset to remind low XXX-foot where mean, down space nice area, postage lower we I even to have around

wells several ago that all drilled on we foot X,XXX were years Our spacing. a

some there place And and like our opportunity for oil So acreage. prices lot develop we us of still as of on an to feel in there a increase leasehold. may our be go further there’s

us. a that So is definitive opportunity for

the somewhere that or We we later XXXX maybe recommendation, make and as will budget budgeting a whether in process now acreage forward move review to it’s develop cycle. that go bit our the in little ahead and

So this that’s at to probably all say about I that have time.

at And time. questions have it we appears more this no

our for forward joining thank success Thank we’d to year. like look move today as the and forward we you. and to Well we new sharing the call into Okay. everybody results

your today’s conclude program. does This Thank participation. you for

You may disconnect calling. for time. any you at Thank