Abraxas Petroleum (AXAS) 14 Mar 182017 Q4 Earnings call transcript

Good day, ladies and gentlemen, and welcome to the Abraxas Petroleum Year-End 2017 Earnings Conference Call. [Operator Instructions] As a reminder, this conference may be recorded. I'd now like to introduce your host for today's conference Mr. Geoff King, CFO. Sir, please go ahead.

welcome Earnings Abraxas Conference and and Fourth Liz XXXX Year-End Call. you, to Petroleum the Quarter Thank Bob Watson, President today. and CEO of Abraxas, joins me

addition, engineering Chief of our have after questions we and may In VPs overview. our that Accounting you operations, to available Officer and Bob's answer any land have

call those being contained to press made today's remind actual are the would webcast call. forward-looking releases. to filings the review that like in actual and to described our our our replay during in the will historical a reminder, filings contained turn considered call materially taped, after and of As over be the that results with from conclusion in statements risk encourage any cause everyone everyone factors this call and these in is I Factors of could are the statements a these available immediately I to vary Commission. are not that could results I'd now facts vary Securities and Bob. will statements. Exchange statements,

good We Thank up and proved and were with up XX% over morning. production Geoff had XXXX reserves year a XX% was EBITDA average you, daily XX%. good up

results talk bit to like XXXX. I'd So, up about have how a a these set interesting very

exit we January XX,XXX production XXXX First, rate oil day guided per XXXX of daily day. of XX,XXX average per barrels announced our barrels of versus oil equivalent of

uncompleted XX the we Three today, of Delaware. in in drilled soon have seven four and and the be As Forks. wells, Bakken to Three

a robust in offset protection. we Both shut second though January and production. the online fall With scheduled for second very during rigs the quarter additional no very quarter. of coming an scheduled frac a third in fall-off and our point wells corporate to wells in fourth Bakken pictorial All accelerate to I abraxaspetroleum.com. leading be schedule rate of growth, frac are growth should was today continue will on the of wells even rate our as that fracked have to quarter. actually for forward uninterrupted production will ahead projection during are profile But A will our the will soft these of graph most and QX from production posted set robust the in are recent to more website presentation the fall XX be production even new wells this during which you quarter

growth projection, You straight will is line. but not production see a a nice it

this keeping are curve. We

guidance the on Our average least over this shown yearly production quarter second implied for time the and which see graph up is in until exit rate place production. at XXXX XX% actual we being

might the quarter, second impact XX With a drilling that I on the revisit strip. current at generates completions the initial price our protect add will yearly frac scheduled from CapEx guidance. which will activity rate and this flow the the at completion commodity and for at side we done free time cash results the be that

feet reserves move southern spacing spacing I see we between for XXX% spacing drilling as of where four free have proper and move along fund we Obviously production our book wells on us results a determine month will our of which to acreage add will this pad south proper in this drill the very well on to have in initial neighbors by the reserves feet the wells tests come interference of time same have acreage four is of our on bolt between this Two close a before which down-spacing pursue. are area the in both help tested continue different third Delaware. we goal south To-date of proved study Spring, in of will Caprito our to the doubling. pad. These our offset and all development. then block, locations net from offset well undeveloped acres on to the our to After summer to schedule To-date are XX,XXX Ravin drill section on spring. the than northern very plans efficiency Wolfcamp The north previously Delaware announced currently could our our these acreage the corporate ready these curves about find that X's wells three northeast these like production hope fracked Wolfcamp our the operators. block acquisitions some returning Again, of call and we'll numbers smoothly, in put drilling and booked to and AX, are XX. summer. exceed the months, that wells between our very X,XXX our to issues. our to use be pad to XX might will of just and and completed pad over are wells spud first wells our CapEx to our scheduled on website, spud close four north The Northwest the our any some four wells perhaps the future four on good over Then near-term I central is to years. the now our on will zone. booking include fourth Up of the the later the wells with our With in four we revolver we pad mentioned four tight two BOE frac have a our determined zones. what and the XX,XXX-foot don't this far projects curves central late rig along had as April Caprito a in will is we should landing rig offsets each while future four our we we be less four dry plan saved, you well which see been well near three in days. had flow for Wolfcamp zones Rig we increase today. with the Greasewood Bone most rig We're to scheduled cash The We moved rig XXX,XXX tight XXX XXXX to the four end XX,XXX-foot bank and zones finishes lateral go, pad the as actual we actual is month, As the significant Ravin guys you at plan use wells announced Yellowstone produced related zone wells be Yellowstone proved a reserves just our all many release. AX X to weather our and Rig proved guidance in undeveloped efficiently. out and At different winter running continued these future presentation each production our when north are future. three from curve Beating Bakken, the be with wells our guided to in Those number in means Yellowstone of wells for it the on should wells. down, latest that coldest in north the production fracked in pad on direct warms Raven of many could imply money wells current and despite in you the north versus pad rig beating Bakken actual upward wells drilling tight money but curves central running our each will looks drilled this B. The the wells the to tight roads have pace, shutting future revisit well laterals rig have Deficiency these the projection. operation revisions. very in of the to that to

we Abraxas foreseeable for As all for firing future. open you questions. I'll see, and can for to look on continue up is the it that now cylinders

[Operator Instructions] with Our question one Aschenbeck of first Global. from Seaport comes John

now is open. line Your

thanks taking morning Hi. my Geoff for and Bob and question. Good

John. morning, Good

really a there. prepared question follow-up First helpful the and your Bob is outlook just remarks production XXXX were on

of terms pace Specifically, of you ahead your drilling like of seem activity schedule. in just does are

you place, potentially assumptions this continued versus also in ahead in a Bakken today many you underlying You how and stands the as schedule to if far was curious just alluded of me maybe And are it in your net how you it schedule I at tracking you ahead current little could the Bakken, Thanks. the wells Delaware. but XXXX both additional to of the looks guidance? the Delaware? in like have

Two more Delaware? and in Two. what the about the Bakken

in I we're now schedule we're Delaware just the on for what think seeing. right right

thinking a slower CapEx wells there the their budget flow moved XX last you our assumed wells for delay well year and you in the obviously volumes from the in our bringing there's If get count increase given will on we XX those but to the those remember is back. up with update,

with comfortable we pretty Delaware, schedule. well Bakken but in is So, where ahead the of definitely are

you by curves Okay. new which to alluded mark it some here were curves? just versus Bob are this new seeing follow-up appear or if but a you then type other Great, tight the was of handily my And that pretty by potentially maybe is metric, those there the percentage could you curious the outperformance revised kind on And beating are you, helpful. new does tight curves. that quantify upwards. I

old conservative. John engineer well. tight Those But are us are like reservoir more using data to pretty Well, an I those production then production you than know curves we near-term have as pretty are available. is always data generated

an tight revise as a have not, that that end at we're year's we're that official did until the again year those We inclined to of of report. revision reserve upbeat the because continues, the upward we So, end probably convinced the year. of those upward would an overly But this the we curves also I justified. don't would at If couple year. end is for reserve this until upwardly and you probably keep report then mentioned, justified revision won't of there say last be an curves address

early won't we year. next that address So, probably until

the in Okay. jump That's helpful, I'll Understood. back time. Thanks queue. for

Thanks John.

of comes Baird. from with Allman Joe Our next question the line

Your open. line is now

Good that understand you. everybody. you I Thank drilling ahead scheduled. are morning of

of your production mine slippage there Is you quarter the a there? schedule guidance on when has full track and year completion first guidance. any the out been schedule, had laid terms production In you still or completion the

there weather typically we card wild The track. like bad in is on much in pretty wells conditions. don't Bakken, the to weather still frac It's

all wells. So, to one frac we scheduled have seven crew do

frac move to same time to the not from next. all at We're pad the they'll So, going one them obviously.

So, one in predict can one conservatism bit that. we're June one July, fracs pad and depending we a saying up But that could start sake the no in little for move other weather. on the just on

then Eagleford Okay. assets? your sale any helpful. of the That's And update on

Bids are tomorrow. due

in working still So, we good people have data pretty a room. the of number

out. So, find we will

Okay. That's helpful. DD&A the And then your the color quarter. increase fourth that? in from on quarter prior rate just lastly, Any

up That's probably is deal to we moving given per mostly a just book. going on [indiscernible] with all the much that unit not basis the the reserves be

going we well assumptions had So, that see likely future curves both in it's development the to Delaware cost not to our you Basin but a driven goes and just most Bakken. and cost from as inflation by can assumption there due that jump, be our in increased the significant on

Great.

It's Okay. guys. Thank helpful. very you,

Thank you, Joe.

question comes Mills Ron Rice. line from of next with Our the Johnson

Your is line open. now

Bob. morning, Good

I of XXX. a Just versus lot you're know spacing on inventory X,XXX commentary, the at guys using

over all idea four inventory could the position? between of relatively new You zones got your what that or ubiquitous different of four break be pretty any zones down concentrated

guess you that. could Well,

four acreage or to at our least We a until in overall little counted proven or prove we bit have get mind. more all locations zones not a get activity them in future more booked or up less the

what So, the in number visited offset compared term we I to to decision we that near is degradation will most put wells continue we're first there our to rates want there important spacing that and if will these any see be drill. the is we and will activity when is drill and just ultimate guess XX, gauge fracing the on over in production, then certainly that. and driver wells. as be the we operators we if see XX parents when interference to well any See XX, production significant between days wells see

our say would another on. So, tuned stay the that to be number bolt continuing would locations, and I say on I just impact add would success of

a listed now. right number non-operated have locations We of

bolt these is we those goal that convert Our on operated doing end most at light of of tunnel into to the the by towards see and acquisitions achieving locations some goal.

talking in all will all now. what think So, additional our more we're presentation than I year locations about certainly this in generate

that of those just the saying. Bob to add one thing what risk all Just I've to did geologist mentioned, was our from

five those are locations not of or but all all but like not across it's blanket I'm zones we X,XXX present sorry them five not of have acres. took zones present, five We are a net

So, they're all well risked. fairly

still bit acquisition. the little you a under And on went

close You couple they get to smaller the or more mentioned the still XXXX-acre potential there's know a you're or characterization into out? more you about deal started in that tightly [indiscernible] you're deals of on size sure kinds starting Are recent be so. of where XXX on to pretty XXX sizes deals. I'm and blocks you acres kind was given have Any to that your

XXXX-acre right probably we're I would deals say range. that now the in working on all the XXX average is to in

away very we're goal. our chip any know don't a long-term return more. are nice equity of helps which certainly acreages we is less, cost. our on But Some little little these booking over-reaching at just Which that and by

then XX to one into last With given would plus development and know potential think acreage or plans inventory current and one as XXX ability to be it you talking more continue you of fashion XXX about and out what picture in develop you ties do a one potentially locations on about bigger with add inventory? questions. spacing as timely that two you future XX and there those years And your rig plus

a good more of on trading block. a our acreage will It traded would -- still will on would there's of for probability between some owners. second of commodity obviously. horse prices that I truing say both And rig acreages, We lot a there's contribute going to some depend that acreage we years time. importantly, some very add up our which

is in to done really to second But trading all approaching, rig commit set the our we time. that until certainly that concrete is so on and is want rig more footprint and rapidly at foreseeable future. so, be off fairly right time that And another don't a for we'll now revisiting horse

Great.

Let jump have else someone me Thank in. you.

Ron. Thanks,

Canaccord line Our next Genuity. Roach the from comes with question of Sam

line is Your open. now

questions have My Sorry. been Thanks. answered.

Thanks Sam.

question with [Operator Ziola the line next Stifel. Instructions] Our from Mike comes of

open. Your line is now

you with Hi, - try Geoff. ask point? lateral you at on good and the Bob obviously to I success this ability very desire short to some morning wanted morning wells. the had laterals or good Any good longer

it allow us laterals. together no adept longer ultimate which goal. quite will the trying I so acreage doing it. our Texas perspective and all specifically every Bakken, It's West put Texas is in day our That's at required doing a different we're lateral. acreage drill the problem and to is ballgame from and allow to leases two-mile We ownership drill do have a which lease an cross to much to you line not pretty

we're through inventory would the that's work that. our continuing large say land on to that a the be They a limited of laterals going I of two-mile well Greasewood and be goals everything is have X,XXX-foot end one two We've But at we're lateral one-mile next summer. a least of the know ultimately, at least to sometime got not, would lease that maybe we we on well So, the in to great meantime, in drill. might laterals. doing going to are staff. summer to to But have like line the

your you like I locked It Okay. your there. at And competitors with guess your at slide I look acreage. are looks five, I acreage land well When position. look when fairly by

your that current You would Would mentioned position your be on. the you're outside contiguous of two take they you deals those working existing of to footprint.

a our bigger out acre on footprint, working in interests outside we're current existing that is bit there gross deals two most footprint. is but little - the of the No,

Great.

of of on, equipment worrying any curious that sort there is any cruiser at Okay. in Last one kind the issues play anything constraints getting this you just point?

fourth when hard Well, so frac them. get very companies for we've we're needed we crew mid-April the a a drilling crews a just well pad to of the but hasn't right very got been crews scramble issue. relationships for able far great We we've really huge and it with now. for been frac We've fast well and that got four number frac

use one. it any we So, couldn't to we're probably faster going get that on then a crew

the crews issues. but far, is tentative frac scheduling so issues. bit they're So Consequently a in a the throughout the we have little we Bakken. no Delaware, Frac easier, little hopefully are more year bit available dates won't any have for

Very good. Thanks Bob.

Okay.

[Operator further King Mr. Instructions] questions like any this I'm the back call closing to showing any in remarks. at turn to not queue time. I'd for

appreciate your today in Abraxas' earnings We conference you, Thank Liz. call. participation

posted will be hours. and day. As I have start website XX transcript great call, Thank approximately our mentioned and available at on a the a will in replay the webcast of a you be

thank This Ladies your Everyone for you concludes the disconnect. gentlemen, day. a conference. you may today's participation great and now and in have program