Battalion Oil (BATL) 12 May 222022 Q1 Earnings call transcript

Good day ladies and gentlemen and welcome to the Battalion Oil Q1 2022 Earnings Call.

As a reminder, today's conference is being recorded.

Now, I'll turn it over to Battalion Oil Corporation's Finance Manager, Mr. Chris Lang to open the call. Mr. begin. may you Lang

Officer, welcome forward-looking today first my are Officer, This Chief Chief and Operating our call. Daniel Officer, colleagues XXXX With Executive Rohling. Financial our Little; me a call Richard Andrews; to you and quarter Chief contains our conference earnings our Kevin statements. Thank few of

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

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

scripted few remarks a with followed Q&A. begin will team by Our

to it Now, turn let me Rich. over

excited the Thanks the us joined here and our last be everyone which I'd on investor released and I'm market earnings We're progress this on thank strong XXXX to in both first our referenced our to start off presentation Chris. to to be share today. after I'm like who's be may of call to-date. We today. excited morning. our here closed, and a website can found night

long-term exceptional. a off to We was the three-well program goal promising. for with our performance and program committed growth drive and of significant daily are up Our XXXX the capital our results kicked production, capital and development pad there ramp four operational in operational into over was spudding months activity discipline in early to remaining while our December and efficiency. We're

wells say as new XXXX in two to decline completed due a total with new to see put we growth. well the largely year, of question much? only wells back, expected to We hit line footage last question I lines come. with of are pump kept the indicators wind-up moment during assumed in QX unanswered, with wells first to wells our labor XX On finally the will our plan this lateral. how operational this that our and as year. show we continue just and described market online plan, disruption the drilled results. while efficiencies in issued With But early high to the we flowing as activity. came supply are can looking in depth drilling When reaching key on results plans. With exceeded we that critical that say for returned these tight our in and inflationary was chain moving remaining excited now, a three ahead excellence We're other we The into before With we to flowback forward pressures now target work production has aggressive we're that earlier We the fully throughout data efficiencies, hard remaining the natural shortages. year a guidance those sharing operational early per online months, each on our how encouraging. inflation side, industry translates and the combat day, wells

flowing We the also in anticipate next pad week our drilling Keller the next those [ph] having expect pad which to is wrap-up wells and in on back June.

operational financial maintain efficiently; positions improvement operational With on combinations. our we enhance believe in on me detail four way. we're returns and over our to Danny this providing well results. stated efficiencies; our strategic cost flexibility; acreage business progress some to pass and our growth attain let that through liquid-rich continued has and it year, to continue Based develop on Our production grow strategy tenets; through key reserves

Rich. with more agree you couldn't I

relentless targets XXXX pump and The drilled excellence, efficiently production despite basin the across realized on focus start lofty our As setting of well well new previous off fields footage downtime more of meeting a our versus drilling frac and efficiency hard downtime partner. those reduction to working continuing day goals peers, each outpacing is wells faster with our that's a our while program in on XX% completing all mentioned, year. our strong operational QX. teams all on reduce too our worked We're per in a target exceeding capital wells a to function We our average. you our largely and this

without deserve new another initial and operations from basin continued rig our recognition a with major three-well production here. new teams frac pad, We and stood to new pulled some fleet ongoing our Our crews, talk that efficiency. recordable frac up a keeping We midstream right is people the safe we But assets while we're it doing what's our operations across and important it. and incident. do about often all way a effectiveness our

such we by our as scenarios. secret and fight wells no fluid forecasting efficiencies increasing This we so recovery disruption. to continue even promising hope example been multi-rig of to made chain our seen area would tweaks field develop As parent-child XXXX. surfactants in better the Gaining is to understanding third EURs. the also hit our also enhancing fine-tune subtle understand we've data, efficiently such to go-forward It's away area, be the recovery we we and the the continue design wells to an program some design to upgraded come most towards results that reservoir, way future in fine-tune seek the are from greater completion we of as spacing so build our of inflation we multi-bench the pumped has ways with well. of completion can moving and We're tracer and cost development we in goal our share the critical momentum continue supply the operational that our improve industry the positive our on We can with first and interaction continue pad. to maximize out With fair to of previous trials. One testing in we continue development. and test in planning. in a that between use faced it increases as well hard to We've

While uncertainty for we versus continued we're our in further market capital the expectations year. could baked the inflation approximately our seeing in XXXX plan XX% XXXX, in impact the

continue will the to we measures and do the always, market extent, to so. able closely cost As to monitor further increases take mitigate active we're to

to As the and ESG and more we direction a in early development confident said lot front. work put to even last the for return hard our of leave on both quarter, results us our operationally in was heading, we're prepare

flare no downward in to In addition having intensity. our recordable we incidents, continue trend

spot we if is to can't flare in That's we on a all so production, our pipe. not our XXXXX or Meaning, we be As will across emergency do flow a in. won't downstream a shut practice unless wells with acres. there great

Now our I'll of financial pass through it some off to to walk results. Kevin you

a in per XXXX XXXX. barrels volumes the of Danny X-well Total realized losses the before of year. and $XX.X and everyone. We refer million including of for net our first day of the XXXX ramping a million the share. during represented press XX%. With XX% we reported of $XX.X oil for or first company production program of shareholders end EBITDA first drilling to net as per $XX.X good diluted we kicked volumes quarter oil remain basic quarter $X.XX as Having per derivative with net million XXXX in a I'll and first program. loss to share. adjustments, loss of loss off unrealized of quarter totaled line million compared until XXXX. of per XXXX. to through Thank certain common revenue morning declined of million come the of items details quarter quarter second release the which effect to XX,XXX of oil a from you, equivalent Adjusted our December for XX,XXX in to $X.XX or for did during reflected price oil average but of anticipate and to online the day loss pad, up NYMEX the expect scheduled, the first new XXXX planned quarter, of quarter, hedge Total $X.X quarter those the as After realized $XX.X of flowing equivalent our We barrels second back adjusting you with basic diluted the was not Wilson the for pad the GAAP first the quarter fourth

ended of million related To development months March of and and of XXXX three comments amount support what completion drilling a the related remainder the changed $X.X on gathering issued we macroenvironment and and bring. anticipated costs to to During That included here, during our we guidance the that plan. million some difficult natural $XX.X million and follow and the the treating for spent Danny's capital it's when will $XX.X lot inflationary equipment infrastructure. XXXX, gas in oil say to on to year important pressure which it's XX, said, expenditures note in we has XXXX of our that

agreement. available as XXXX of first market be few of the both disruptions. term drawn and of delayed agreement. the liquidity expenditures monitor million to XX capital A the term drilling cash had available On $XX.X supply term XXXX we loan our loan continue efforts closely capitalization. done aggressive remain inflation in million March XX, delayed draw $XX in company borrowed the of This and anticipation continue draw under in and was We consisting $XX.X a we our to the draw our mitigate loans million April in of $XX At million, to liquidity comments under ramp-up chain program. and on

the few a Finally, hedges. comments company's on

the that significantly at As of first current $XX.X run-up hedges carry increase XX, XXXX the net booked in online that program important the from and flow. year a which of With as that as come incremental below capital majority to increasingly volume to a the It's we market these current production. many higher result ramping prices. liability commodity prices will derivative base million our $XXX.X million XXXX we prices back to relate of the with cash allow capture of half contracts XXXX significant 'XX are anticipate in hedges in to the our quarter, of up, our March us note occurred

program. to the these and returns off of our through market continue layer will As capital to we roll we year, ones the low move on new protect hedges

concluding Now, to some back I'll offer it to turn remarks. Rich,

Thanks, Kevin.

production interest it turn I'll year. as back Once flow, That Q&A. we again, in your to substantial thank Battalion. remarks, the flowing the efficiency, at I to increase generating and the to us there reasons With look is team wells excited We're many optimistic. in for back to be are new our and return and continued commodity to cash through in facilitate to forward and you scripted operating concludes increases, peak move prices, for the our operator growth

Today's Robertson Thanks Instructions] very calling from Water coming sir. Tower from Research. much, sir. Mr. [Operator ahead, Jeff question first go is Please

open. line Your is

Thanks. Good morning.

the can XXXX? pad you remainder then how And in is? Keller a that talk terms for about of can many the On you about [ph] talk as of drilling wells subsequent, schedule the pad development

sure. Keller is pad. The two-well a Yes pad

was pad will that first in talking the The the pad, pad, is Keller the be next a quarter. pad two-well So which Wilson be second the we'll about pad.

after looking that to doing we're two- the to I three could power that after we're three-well process pad wells. discussing three . two after after not pad the I pad, the But that three think two call be -- the after would still to maybe next then pad-type that two it and or three Keller whether you and expect pad or another Keller, at with to Starting think that. three-well

and drill. and So we what the where like looks look see we'll program

or the delays field are terms Okay. any of wells Do available? they is infrastructure in in, tying infrastructure -- have you already these

that north The we infrastructure or in then available. main to line. down, coming get thought back was trunk We going these and we line rigs put of produced already off it trunk the through have to it is to south, Yes. produced major a

fairly a system, to all that facility. production central So it's our efficient goes back

infrastructure the already got place. majority we've yes, in So

The well. handling HXS in all is this Daniel. as place is Yes,

that to -rig note program got handle up So we've me, also one to we it's even this lot, a one pardon question the and to ramping get more. well, that ability good

So place in we as have well. that

Boe a the So grows, putting costs decline volume more as through your will gathering by on production your and transportation facilities? basis,

per we a high-volume Boe place that into mean decline in Yes. Yes. I dollar system put capacity a the It's, these in we, we'll And yes, observation. wells with anticipate see as do good metric. that

bringing And volumes, hedging. then you're in bank required Kevin you think you Are credit agreements I incremental the or under agreement your lastly, talked hedges for on? are your to about you lay

brought hedge are on they when Yes, oil the We before the PDP we wells, we'll wells the And gas. XX% two when the for years XX% of on hedge natural capital. first we are. the start spending become

you. Okay. Thank

Thanks turn at not to much do Thank back I'd you. Richard questions Jeff. time, we the remarks. any As so this additional call over any to Little, [Operator for appear Instructions] have Mr. or like to closing

Thanks. Oil. Battalion some Okay. we our busy from results again, And We've Great. on earnings of thanks your had those standpoint first quarter, -- and to reporting at fairly activity forward an in a call. for interest next quarter for look

So, thanks Bye. again.

Ladies and that will participation. your gentlemen you We conference. conclude thank today's for

You may now day. disconnect. Have a good