Battalion Oil (BATL) 12 May 202020 Q1 Earnings call transcript

Good day and welcome to the Battalion Oil Q1 2020 Earnings Call. Today’s conference is being recorded.

At this time, I would like to turn the conference over to John-Davis Rutkauskas. Please go ahead, sir.

Good morning. few colleagues a like who by introduce. to joined of today, my I'd I'm Officer, our Rohling. Richard Ragan Executive Chief Battalion's Little; our Operating Altizer; Chief Chief Officer, Daniel and Officer, Financial

This contains conference forward-looking call statements.

yesterday in references most description non-GAAP detailed contained financial of GAAP earnings This see release our our For directly non-GAAP released under yesterday. and also financial are a on includes of posted call those the comparable certain announcement our measure measures disclaimer, our earnings to issued to conference Reconciliations website. measures.

We found have will during also may published an investor webcast. on be presentation, which this be and our website referenced

it turn Rich? I'll few scripted team followed over Now, to present a to our Q&A. by remarks

and John-Davis. Battalion to Thank I'd our Battalion’s welcome investor like first update Oil to as earnings Corporation. you, listeners second call quarter XXXX

call, earnings gas and introduced we to team our development. approach our and quarter's last During presented oil management

emphasize agility to me QX program. to production going decisions all heard doing we're level as well say costs had decline, to You our we planned team's We discipline what market of to for make continued fields. capital down of response already we to as the required proud in of in even our an discipline. ability quick their and thoughtfully suspend drive do. integrity, and to be the as had time I'm And capital greater our across

for an nearly in price into XX% will the of a taking on an XXXX. year more basis our later presentation. In of QX, we roll of $XX all-in two entire with when three production over we our continued have three barrel the XXX% of fixed the hedged in into $XX.XX period. book Ragan specifics of touch a to strengthen And out all-in with year volume price hedge XXXX price hedged our and PDP account through with year

in We're confidence a borrowing reduction We work spring in redetermination BMO were of achieve our base. thank this ability with deliver. in within now to level and until transparency and comfortable I that their business to plan our to during I'm at next to want modest operating also November. redetermination able team's vote for their a our BMO our

on we creating our on call. business our remain our such focused as levers AGI value in mentioned We well last

permit the drilled, down well With drive options with created capacity. operating further have others in area the hand treating costs an helping potentially and now we and that already the their to asset monetize HXS we've while in could more

in $X.XX on G&A quarter. We per down as continue in as of Boe well Danny in of that adjusted number presentation. period portion the his will $X.XX touch last seen this the to We we've year brought improve a only efficiencies as versus efficiencies per operational Boe same

the development With see rig X reference to market on increased shut-in. rig to half release over the expense voluntarily other possess our call merit operators we made obligations to the I what determine breakeven could back time with assets. of activity to we like along to last production the the determine return Ultimately to shut-in tier of in operating maintenance, well high the which feel a I On uncertainty. market a XXs in the a campaign out keeping to initiated focus prices and and best leasehold monitor with to I drilling in thought Furthermore, that reservoir our wells our face call, of oil we field. elected we'll

we produce This therefore, the year debt pay to instruments end the offset and how also allows financial simultaneously the down commodity fields. significantly exposure eliminating physical ability hedges are the us our deepen are our money, hedges that price. of we our unwound to no and through longer purely As required regardless sales, to of speculative

including as been continuity March responders As well a pleased Houston-based the by where took remote our COVID-XX for the help and proper personnel. within support field operate I'm action the cases our workforce. far spacing in avoid managed business We protect of immediate employees COVID-XX of report arrangements in among providing pandemic. employees, active as implementing our we've that work during officials we to to to to as for update, We've health safety city and communities first plan, this

invoices Safety to values and XXX% one conduct harm's of of of is processing our to continue to including keep a and work our we to stakeholders. We our continued out remotely, team the way. situation payments core our monitor

his let Danny our operations. on remarks deliver I'll Now,

and good Rich, Thanks, morning, everyone.

world and through to a As has industry easy Rich focus be safely right Most downturn frontline crews and to a delivering like that so continued leadership lose to I'd our recognize everything nation fuel the importantly, gains it'd the because even in times. challenging we across going quarter highlighted, operations. did on take busy efficiency now. the this had savings to in we and our moment with

Average you and Instead another didn't the of programs. representing our X our pad. a true In right. well’s which stand [Eureka] record days $XXX over and drilled fashion, Slide that, on on on on completions wells came in graph drilling the the as that can see represented fourth just well red Battalion in improvements you versus the continued record We see QX along dotted drop from can cost in both cost quarter. foot the XX% a the lines

years our We drilled the offsetting existing seven-well are rig last we laid want OSHA fracs jobs the and went quarter four We've frac wells efficient Also up postponed performance us ahead our our the in of budget a under we've facilities. the and pumping waiting our while campaign initial pipelines some on have next finishing Draw and pad we the early after of and As schedule about we to wrapped and we're Rich most said, Monument two and but from excited in crews DUCs up together. well larger in thank have the that seen. without two down basin recordable leadership Precision.

time some So there'll efficient of right. when capital we'll be the spend most is the

LOE in from other first seeing artificial history LOE was progress workover trend This for a implemented attacked proactive program expense. categories. down. that operations and driven with significant chemicals failure and of a our wells at the well by and our we In those shows service by kept Boe, set costs. The the individual a teams This but we're new initial reservoir. and now rate have well prescription high changes the all well’s X expense benefiting lift, LOE our had aligned Slide are $X.XX a that partners quarter and had

and quarter, are by which is benefit an year. down work showing the early the see again, West anticipate Hackberry seeing as at through chart. the by in rates in the necessary downhole can workovers the XX% in in up QX increase we but had Failure in doing Monument fewer Quito you QX

work this poised outstanding had of All us second quarter. an for

to we're liquidity. in these While efficiencies and paying setting our production, are overall team's work dividends hard

as train Slide installation to Draw gas facility the In of to-date. have HXS day of X of like issue at through here as the now the a addressed handling. proud team's finalized quarter snapshot sour another the our rig XX,XXX of have Eastern recovers. are prepared We're cost market keep sulfur now pounds the we operators solution growth up the It lowest our work with for at the capacity of one two some and of to have the program. the to very Monument per redox Delaware and side that a on much our Basin. third of is liquid few capacity a feels We've we when are put one and

Rich operating near a and that in the created opportunity we've that bring costs. for significant This is company further future. lot As value great and AGI will option an down a facility us the to to allow to drive mentioned, by done the team prepare will well

I'd I and thank impact our it to Before to work hard a set continue of make over the areas They Ragan, their to the unprecedented us for teams for business. grow across in to these foundation times. significant hand all like

highlights few and address I'll QX from our then with liquidity Danny. position. Thanks, begin a

the per was barrels day. oil for revenue Our the while was barrels of $XX.X The barrels the XX,XXX of quarter oil company oil QX from day during impact per and production of was realized was XX,XXX We barrels gain at WTI year first million of day. about crude oil per daily oil last represented at XX,XXX the XX% of the of NYMEX of XX,XXX year total quarter We of net oil exited million. with $X.X which contracts a XX% on derivative per earned quarter, realized Boe excluding day. of XX,XXX which hedge production increasing last for per settlements. day, quarter sales the Same quarter

the the Adjusted to cost. $XXX.X was share quarter the [TTO] basic year, million was quarter in per compared of $XX.X last same $X.XX. quarter for resulting result income for of and from million diluted G&A operating earnings sharply the declining Net primarily million and EBITDA $XX.X

reconciliation Our table our EBITDA earnings can found announcement. be adjusted in

per were of last first of per Boe was Boe in the compared first lease quarter to in workover for $XX.XX $XX.XX quarter quarter Total operating first per as expense per compared operating to XXXX. XXXX in the per same in Boe well a G&A Boe and $X.XX the of per Boe to XXXX comprised $X.XX Boe as this adjusted the of year. for compared of quarter This costs quarter $XX.XX part of $X.XX

additional announcement. metrics data to in and financial the earnings For adjusted operating refer table selected financial our data

wells, we HXS of AGI $XX.X bringing three Valkyrie new in wells system. seven completing expenditures quarter related recently included train our the securing the wells our third capital permitted incurred XXXX of to and surface acreage During online spudding expenditures These first processing million. and

quarter. the capital has for Our Rich And quarter. early suspended original our for in program the XXXX the first budget capital already of second share slated as lion's mentioned, we had

the team in which borrowing pricing We considering current in will represents and recognize the the environment to million announced they to This month, based from partnership the to Earlier BMO programs. monitor and our our we our $XXX thank base for continue ahead opportunity for markers want redetermination process we reengage commitment in belief assets. a their resulted our million. reserve BMO of play results specifically our of role valuable in down outcome our borrowing with which to and reduction, $XXX development general to and to the this excellent yet base industry lending. scheduled in an opportunity general I reduction take their XX% this a conditions around believe is again

redetermination of open in credit. first on liquidity on this based under revolving of cash for forma $XXX,XXX Pro million credit of facility, less the hand, was the letters our $XX.X as end quarter, availability plus Battalion's

substantially on value $XXX not production access mark-to-market for mention only at first the I'll end also all end to hedge XXXX a through our our our million but Finally, of ample of does discretion. at our of the us book. liquidity the of solid provide hedge With provides quarter, price for

hedge production with Some all specifics XXXX and and and PDP half our is back swaps vanilla XXXX book: the for of XX% of on collars. hedged of X-way of XXX% XXXX plain

also per XXXX WTI is our $XX.XX old back hedges differential per point is the hedging that underlying positions in barrel, key fixed pricing, while are of at of two based to and price, unnatural. the for $XX.XX out All-in the at XXXX per components I'll half basis other XXXX hedged addition we in those on barrel, with $XX.XX barrel. market match pricing

we sales forward the financial and we like overall acknowledged we're because to debt scenario we path one are happens is to settlements, no in strengthen physical matter next, today of realizing. continuing previously find of we our what have confidence earlier, down for and strategies uncertainty, paying financial Rich position. the Between while ourselves environment downside one committed in preparation the a our in implemented Like

to Back you Rich.

in decisions. Thanks share to Nevertheless, while far could long-term of do new such you. same near are I are notion our We're to half to principles that what with these bring sound be reinforce Ragan. production. of shutting term wells planning, online confidence over more way accustomed times as difficult make challenging, remain business the best the than certainly we in I strategically

Our preparing respect. optionality such in, long-term ourselves us development actively we creating such one done and with as commendable job of find as the simply a for team each has with strategies key other mineral circumstances relationships vendors our in and owners treating building stakeholders for

strengthen around to end advantage more market our continue we'll I'm our hopeful of further year before time you interest Corporation. the turn your but ways the sheet. the enhance and Thank regardless look for to competitive for will in Oil Battalion balance and that

With that, the call to we'll now up questions. open

& Coker Parks We'll today Instructions]. our [Operator question with take from Palmer. first Noel

by run you. I I just few wanted had things a to

With you do percentage have for figure look shut-in roughly your end shut-ins, unit that or sort that what the might up you the have an LOE where of either might for of idea like? period

a the I about with giving day. barrels think the Noel, you're denominator cost problem per cost, looking asking we're and unit the unit at is in

so yet how we'll And shut-in we know long quarter. the don't be for

that tell so you the market and assess July. can we've shut-in I again May. And in from in June We'll

for you're the in so shut-in And I -- asked shut guidance and second give asking you because period, I can't May. think quarter so

guidance right So quarter, make an would because aware going but to market, on assess of not the the given unit our to things continue to production be we'll we're and LOE what the cost difficult check be is call. for

because what I I don't production sorry, going know to is you So, unit be. can't the a give cost

wondering, just going costs left anything be expect I that cost less just forward, fold also far similar ago into much reported what to to before absolute on G&A? that as And I'm is it the as looking will was that recurring items either was going G&A, noticed the And there quarter you of at enough. much problem. a No are the filing. year Fair level separately not -- dollar or side, restructuring

have a bit. little still We

on think and offices we down we the there. working that Denver of we one the so the did call, nobody shut was mentioned Noel, the I things we and There's office. consolidated last

from We get to -- we that need are lease. still out under

And those agreements working so we're today.

we've the I with got that short the cost. so last that, on think restructuring might And deal to of thing be

for environment that be Do have basin. to you larger the either you? might is on might what there on at in looking just consolidation thoughts like any And assets great. the look about about, I be guess any And Okay, help And the thoughts market other looking properties? be what I'd you maybe or you curious the way had that. attractive one at other on decide most would trait would that attractive

landscape, easy value think Noel, one not for there's I lot Sure, that's the now. a you When of right given an undeveloped. look across being

we're where we going continue looking mean would into Basin we efficiencies, realistic we'd heavy, about deals that to Permian to we're probably to but because able going So being at, operate. also our that to that's want it's PDP look be which be be

we're as strong So we're got a course, not our going at balance sheet of to And that be leveraging looking transaction. looking done we de-levering balance to job doing good a well. of have We've sheet. and a

be So, those are the us. for looking kind of deals at doing that we'd

of down thoughts about the maybe hopefully for me. at When Okay, been hedging. for now hedging planning what's familiar I'm is products you've down great. those rest one recovery we you it NGLs? at NGL so of And and any markets just just far the looking last later, available for and as back with any slow the some have do year have not on looking getting But as into horizon -- sort

be I'd you. with No, honest

be NGLs of business to products. looking and gas any his focused drives in what and to going at before oil. from Ragan going hedging coming We're comments our improvement look even mainly that forward we’re doing alluded those at pricing think looking kind on revenue for I XX% oil. that's of We're we're our in

we with Next hear from Guardian. will The Emily Holden

information I amount. wanted that provide about more seems loan. to you have ask the SEC about Can to had doesn't an that say a one a in that disclose taken to you PPP you reference filing It that?

your to businesses and million were We Yes. of up think our operations. took but PPP it like PPP right didn't thing to $X.X set was felt Sure. helped the We our further we disclose We amount the size loan. do. for us that about loans

it. So yes, did we

for today's or over any remarks. to additional now conference session. conclude the turn will closing I'll That Little Richard question-and-answer

we're in protect on Thanks. our will same the be to convey create thank I ways stakeholders. the for we at to call I Oil. to interest time to business going for on spell able everybody great. want Okay, Battalion were your continue while hope this and to to we're opportunistic we to find value that our going you

of industry there it's hearts out So were in longer most workforce workers expecting, of pandemic lot than on first. families safety uncertain shape definitely to that and in our we recognize than we're our in a our the future there's has not health our lot while us better an facing lost we'll lasted them. This and we go but continue to put out a and the what downturn,

and Like present when keep the prepare we'll everyone responsible the growth we'll eyes or when sure I ball you assure on recover, does not else, and market the turnaround but itself. opportunity company this that we're will ourselves how quickly we'll our for

So for time again, today. thank you your

your today's conclude you will that for conference. Thank participation. And

You may now disconnect.