Epsilon Energy (EPSN) 9 May 242024 Q1 Earnings call transcript

Good day, and welcome to the Epsilon Energy First Quarter 2024 Earnings Conference Call. [Operator Instructions] I would now like to turn the conference over to Andrew Williamson. Please go ahead.

Thank you, operator. And on behalf of the management team, I would like to welcome all of you to today's conference call to review Epsilon's First Quarter 2024 Financial and Operational Results.

would forward-looking remind statements. I comments that begin, include may we like you to our Before materially results It of forward-looking Epsilon's differ factors be statements. could the should noted cause actual that results in expectations expressed or a variety from these anticipated to Today's contain also may non-GAAP financial call measures. certain that the for issued disclosures of on Please refer we reconciliations measures. to forward-looking non-GAAP earnings release yesterday statements and

Jason like to turn Stabell, to our I'd over Chief that, With call Officer. Executive the

participating Good in call. Andrew. Thank morning, XXXX you for first and conference our you, thank quarter

Joining CFO; me today and Henry are Andrew Williamson, Clanton, our our COO.

to We will be the questions available answer call. in later

Today, offer remarks more prepared and brief Henry on comments Andrew our financial and forward I'll keep detailed and operating and my results let plans.

well. Our Permian assets to continue perform

X summer additional over in bring Fuego project online wells in County. Pradera to the Ector gross expect the We

We of in third reflected half combined to timing several be acquisition shut-in the a the week operations. quarter a location this won't X potential with year. are and second discussions of until the in during activity, our results frac May wells This recent of well also producing due about our in in additional fully

expect in volume quarter-over-quarter see second quarter. the However, liquids still we to growth

development Woodford second full bench taken a potentially prospectivity to the core March assets In addition, to evaluate a the in our Bench Ector. the was well deeper in further in interval, drilled of adding in the

this progress the We on of evaluation. will you keep updated

prices X.X quarter will sustainably. turn-in we selectively not Currently, we net on Pennsylvania, curtail In the last wells, natural production our until likely X to actions support and that completed gas begin have lines partner improve of wells completed operating delay production.

conversations the first based for is the production operator. estimate with TILs XXXX deferred current Our on early on

current cubic has operator to of a day are and million production to prices production. feet curtailed in improve. we the as X.X return in this addition, These some response curtailments pricing, anticipate representing NRI production approximately Auburn, existing In

our more XXXX XXXX prices, our in program flat current defensive combination diverse in hedging revenue volume combination in to pricing sheet in for mix material project, our the slightly and to and of expect versus allow to continue with us of strip improved result pay gas at flow strong we our promising warehouse Finally, to cash environment. an invest balance dividend and Permian which, will down

sets in this XXXX. flow for of All uplift cash potentially us in material up a

Now like for to I turn some the call comments. to would over Andrew

Thanks, Jason.

months building continued investment Following wells. remainder on $XX business, some Marcellus million recently we've comments XX% with quarter that the was of through spent our XX on the Over activity made I to up in spent with completed over March, in end. last spent the the ramp Permian over the

combination operating investments cash of funded These were by cash flows hand. on a and

turn contribution and in X the Pradera The during focused million the acquisition, in a yet Woodford contributed spent a that contributed in well County is current The $X locations. to quarter awaiting was delay important PDP of line date. not wells mentioned to Marcellus and has spent estimated March which that we're on. Pradera. The month and takeaway the quarter million, the project, are million with the That spend that of on spent X activity Pradera bit of results, X-mile undeveloped characteristic XX we undeveloped gross wells X have effective $X leasehold Ector only $X.X where drill Jason over is the million excludes contribute the earlier. on XX% $XX full on the

mentioned started the setup to through next speaks our the this year growth Jason this of earlier, assets with All quarters. Permian for which continued few

project to of to We contribute strip estimate our about continue We feel ability we plus over flow well XXXX, in cash. the year cash prices. our in going reduction full the pending higher the good at the despite to the gas driven strong Marcellus. at and the upstream volumes Permian an opportunities cash liquids future flow forward, prices Permian portfolio half profile increasingly new in Looking by potential the current invest and

our our also which the we the this right have of will deploy undrawn add where redetermination a conservatively revolver, base opportunity. We borrowing could given we month portion We assets. Permian process in start

and Back new new legacy for the agreement. crossflow to Marcellus, agreement system shippers agreement on the all we're gathering, now final Auburn a will service effective gathering will January stages negotiating establish the of XXXX. The replace in of the cost fixed gas that compression X, rates

under We flat are expect year-over-year is agreement, year which adjacent $X.XX in XX% per earlier MMBtu XX% put and compression, the cross new up for place this rates rates for is MMBtu year-over-year, per which from which $X.XX flow systems, per the $X.XXX for interim mirror which year-over-year. up is an MMBtu to gathering gathering,

and year. the next starting rates an uncertainty Per of these escalate arrangement the agreement, believe CPI-U redeterminations. shipper will remove it importantly, system. the cost will with both on We annually Most owner be will that rate annual came updated service beneficial as at of the

a and the between revenues amounts and midstream breakevens. owner good believe shipper strike also rate We fixed balance operating costs

over will for operations. it we to Henry Now turn

completion be Currently, operations and Drilling which just you, well operations details wells completion lengths with will the with Both flowback working XX% is later will returned Pradera acre one to project. expected this is X completed offset Jason owns production Fuego date. I'd We're July. in project at further to The wells Jason the the the in have in during to Epsilon well on mentioned shut-in a Thank be that planning Andrew. of operational operations lateral expected interest Xth well, like XX,XXX XX,XXX-plus operations these foot. being wells this have commenced for third on provide X month. the over earlier. underway, second will the completed share time.

It position. we underway the premium on Northeast and crude wells In NYMEX in continue currently excluding the worthy curtailments selective Court a assessment As X-mile stated with recently gas we $X TILs an of is current section. the pricing wells this of production note is of assuming significant transportation. Further for gross per that agree position place estimated oil, acreage spacing previously, to interval's locations fairway the XX analysis adds the Pennsylvania, pricing to laterals, to X drilled Woodford the on until lease prospectivity of newly taken improves. deferred within received

consistently on As production net the prior the area depending our new perform will disclosures, from to the double are stated in wells gas expected Marcellus. wells and the roughly in other timing, with

Jason. to back Now

Thanks, guys. can for lines we the open Operator, now questions.

Jason closing remarks. back question-and-answer This [Operator Instructions] There for queue. the session. would turn over like Stabell in any to no our are to concludes I the questions conference

a weekend thank operator. Epsilon interest ahead I you, hope you. to again Thank a their day everyone great today. joining want Thank us for good have in I and and you. of for you

The has Thank you now for conference attending concluded. presentation. today's

You may now disconnect.