Mason McGuire | executive |
Ryan Smith | executive |
Charles Meade | analyst |
Ignacio Bernaldez | analyst |
Greetings. Welcome to U.S. Energy Corp.
First Quarter 2023 Results Conference Call. [Operator Instructions]
Mason McGuire | executive |
Ryan Smith | executive |
Charles Meade | analyst |
Ignacio Bernaldez | analyst |
Greetings. Welcome to U.S. Energy Corp.
First Quarter 2023 Results Conference Call. [Operator Instructions]
is conference this note, being recorded. Please now Director of will turn the McGuire, Mason to over Corporate conference I Development. Thank you.
You may begin.
Thank Quarter Call. morning, Energy Executive and you, everyone. Welcome operating financial an outlook. discuss provide to good operator, overview results the Officer, of will Corp.'s XXXX Smith, Ryan First Conference Results our Chief the and strategic and our U.S. company's
full with March Except undertake summarizing to including Investor to statements XX, business U.S. Relations in that our A reports operating and due closed in The and materials and statements. Further, please the disclosed measures call filed periodic non-GAAP we yesterday, Energy to law, call. call uncertainties, Securities quarterly by Ryan that, to www.usnrg.com. Today's X issued non-GAAP projected note months differ press presentation financial conference at the market future Commission. together risks Actual contain ended financial and GAAP now release of expectations. in those conference our this discussion during may the latest various results risks measurements release, are may earnings release would may I our no XXXX. presentation. With our results turn required forward-looking section be of and to the financial press accompanying with the Exchange for like available update reconciliation Smith. significantly described After obligation a as over the about available forward-looking forward-looking today's statements from website in are
XXXX. for as company quarter, carry into and U.S. for you XXXX has continued throughout your operational earnings for first call and in the Mason. Thanks, everyone, quarter Good the strong joining realized today us first morning, momentum Energy to the forward our thank interest
BOE X,XXX average quarter, equivalent natural year barrels our feet approximately day, sold X% an quarter X,XXX total a of and the last million Rockies for day. Specific per the focus of the during During oil to gas or production XXX,XXX of approximately over regional barrels approximately our averaged first of we oil of per XXX XX,XXX we a when areas, XX% first cubic quarter. of increase BOE grew
before quarter performance per per cost barrel the derivatives XX% resulted natural lower of downtime XX% gas, which financial or that blended Texas Coast volumes. was Karnes related say, to, and back Texas since would East assets Unfortunately, was but assets County grew wells come X%. realized and have West BOE. $XX.XX of below that some were highest the in grew of Texas $X.XX first approximately normal, our prices assets, $XX.XX maintenance of of significant approximately of despite per Mid-Con online. Realized quarter, margin period and Mcf approximately some unplanned our BOE, Our approximately in This in Gulf of a $XX.XX the our properties which specifically I than pricing experienced our South undertaken was higher during well quarter production year those the that and during last oil prior per of significantly
oil. and the down driven mostly Moving last on the the quarter, in million from mentioned approximately to by came million $X.X previously from of year, first revenue. net in pricing $X.X We quarter of the recorded first decline our sales X% XX%
income the to line Turning more now statement. expense significant items on
approximately $XX.XX compared BOE $XX.XX first or million $X.X Our million the to prior year per expense period. or in quarter lease BOE $X.X in was operating per the
course, on production profile. properties the properties to acquisition the affected because due which, cost Texas our the and in of both our Our primarily XXXX, of absolute of increased additional cost unit and maintenance per LOE producing increased unplanned the South
in per per made $X.XX BOE. the low all during integrate operating we the per $XX as recognize that million around to to of about or $X.X forward, cost efficiencies fully we million we we forecast portfolio, quarter BOE into expect the or XXXX Production approximately average XXXX. and LOE further $X.X were Looking acquisitions taxes
rate of approximately tax held as revenue has at steady a Our percentage X%.
G&A, versus compensation, share-based was throughout Our to were approximately with expenses excluding necessary G&A The year $X.X cash period. acquisitions prior for made personnel are that million million came XXXX. $X.X our due modest, but the increased that to the additions
to We optimize quarter to in moving management forward. focus on expect per approximately $X XXXX million that average G&A and maintains number continuing
realized the Quickly quarter touch adjusted lower Energy our recorded quarter in $X.X hedge on at compared XXXX largely the in EBITDA. to first of improvement U.S. negated our book. XX% the in million first Looking prices as million volumes. $X.X sales
than $XX $X.X We With our revolver are off in bit outstanding plus cash used the and the liquidity million. of majority first with expected a an being where assumption had XXXX, sits about hedging to million are program that around on on Ford average one XXXX. that oil revolving in cash, our under our a perspective, we do gas we're likely will debt the $XX currently any the continue balance acquisitions we're approximately may now, evaluate million barrel. have forward. Where with management in our hedges commensurate We available amount potential sit facility on be XX% that floor similar a capital with risk all a we environment briefly of total transaction. Touching the of some strip so we did sheet. our rolled that credit XXXX pricing in we we volumes little the in At future hand. of unhedged will monitoring today, per are collars, on right the gas moving greater around hedged million we weighted $XX quarter on $X the from had Under level oil comfortable additional and of we hedge with end, quarter, as we
of flow outstanding going -- to paying to our we our feel continue we leverage profile continue portion where cash While intend do down totally our free a forward. with comfortable today, stands balance
positioned start oil life in turn there's like XXXX temptation fact declining volatility Now prices. potential by is the a commodity sheet, our would outlook, model capital-light, side macroeconomic lever the up been have energy lot which I recent gives respectively. right business, commodity growth a is assurance of and one. With environment is capture low-decline to health us our prices. in the the of have, producing that an significant our low that in liquidity all Since us leverage XXXX and XXXX other that in while our sheet a value strips setting of to profile a we say the avoided in face environment, prices up-cycle we downturn pullback the recessionary that to of remaining X%, the All that XX% year, balance of high-quality in weather volatility because the the that commodity with that. we to and business and we are we backdrop the chasing seen very of the balance good times our uncertainty have to confident any successfully cautious and assets, with We're in our can and
pleased the into out set some XXXX. official While to very guidance, of with as deeper would performance producing standpoint, like we're we our head we From expectations not I assets. operation an do put
minimal, hold commodity It company's from we're current to today. can maintenance percentages. a our nature decline required corporate the easily our And the experiencing upper than conventional that single-digit production mean? does Given flat production rate and at these portion is their means what of history, lesser wells in capital be the cash it and prices is of flow funded free significantly and
expect we infrastructure operating reflects expenditures investments opportunities well our return-to-production the on to of the investments various XXXX, structure based assets, million portfolio current that approximately during optimize highly as $X capital throughout have So existing of we assets. as several daily cost in economic which
operating As improvement to I run the improving and driving generally down line do continued flat G&A low continuously per steady earlier, item flat lease to cash expect taxes throughout see a in that BOE, expenses, XXXX. rate mentioned production we $XX in
be the that would is up workforce that spend think couple rate, a synergies let strategic professionals minutes of running expected around noted have on G&A While with right our business. current future cost realize finally, company me make our the for to business the acquisitions our a bare-bones outlook I do it true now. And lower run we asset should definitely
Our priorities are threefold.
First, means return. every we that take our This we stewardship responsibly. and seriously must we a investors' how that are proud assets have capital allocate operate we our and environmental positive dollar invested acknowledge where and work, of and
to our grow development long-term $XXX of strategy on allocate with smartly to increase sustainable and seen the production to just that has increased business. We've the strategic already value proved believe current million XXx targeted have that a repurchase acquisitions, And Board's our increases developed those Thanks year-end reserves our same time margins. improve period, profitable third, both operating that above and more activities acreage. shareholders. We ultimately, and million returning cost BOE our company's announced enterprise recently flow increased from understanding we to pricing efficiencies significant value million share of the create $X a resulted primarily determination months I acquisitions over the million BOE the company. the committed cash strategy to the reserves in that increase the our the X.X company and XX and the of significant X.X to for shareholders initiatives and a We've Two XXXX to value scale capital in SEC past through over the capital value, rewards to producing believe at seen strength reserves business both underlying existing brings company's Second, value. far the and in we're through underlying to dividend demonstrate program.
environment. U.S. has and of in a ability close partners that with value company. given history of on to the that of to of team, community we Energy. achievable, track believe every the the We network thank a market balance asset we to a potential evaluate There's oil again over single continuous want We sheet, your the your a and focus sheet gas to for are no risk uncertainties, our maintain do. and post-deal and balance we cycle, other ability have incentivized all creation team economic U.S. M&A proposition task of confidence stewardship. and professionals, fully and exposure and company Management, current and producer to the which innings. and decision the of protection along our an that, the strong the continue in efficient that the you with we're has downside offer may our matter quickly While offer challenging strategically energy strength in quality We remains and is to Energy that proven a believe unique rest a mandate the is and the the offers great early trajectory to interest growth our day. I the disciplined create, record highly extensive support value, growth I'll I who we value grow to to motivated and been shareholder be made public mandate oil of no turn for gas that every with value it of those grow operator, looking believe at size along of the Q&A. drive the and at company. With forefront the
with from first Johnson Our Instructions] [Operator question Rice. Meade Charles is
in Ryan, I about the in you said what to back go downtime comments prepared County. want Karnes to your
Can was is is what again normal, we're of I I'm aiming that or And that really handle It fix -- the more framed the the give but needed? going onetime this at this kind think a what work you I of like -- little kind thing again. the on a not -- is I that to nature you this way up think expected. bit crops whether be could was it. have not whether to detail you a of
Yes. question. No, great
would I former. say more So the it's of
our -- So the just on bit digressing little question. a
has we base We've a focus know, that is clean and time. #X like point, done we've of highly the To up you what great is time and As the job always up. on this wells asset our right, it's run thing quarter that right conventional our percentage County also as that Liberty run good to have cost, costs. outside acquired, has quarter we've were I going highest had. We're quarter go a Karnes of -- Unfortunately, this any and been say wells went in down. past been down producers would probably we lower older keeping that that wells County. as
it out like, out pull So probably as and something unexpected terms standard or, was that of dive it some nothing to need tubing it have was into in oh, was we oh, hole of I much the expected check we're -- like XX-month issues once we seeing The expected know could question so, that work, so or on cross this down it's well. But mark, coming. to unexpected XX comment once as hopefully. they're kind LOE the go months services in every how likely is of you you -- as
just know You it's don't exactly coming. when
don't the run these these production our were If higher then expect of look-back the an kind same first looking need wells increase a at annual, we on to for stays while So expect come out originally we would quite on to wash now. rate on time our basis of wells, run terms quarter. naturally probably and pre a on maintenance in I what in interest
it. Got
should -- I in indicates I'm But we looking sequential you I we increment really be interested there, -- the my we XQ? but kind XQ, the talk trajectory increase -- overall. about that question a just production? XQ what to it expect all for is in think think of happens what anticipated mean, small So a should in for second which
do. I do. I
Another with It like maintenances or just of properties. do to issues changing had high curves put was -- nothing revenue would the on well it be quarter-over-quarter to way decrease underperformance. type
all back So -- once they're now. those online
So I fair a think that's assumption.
it your Maybe I'm if are But the some in have -- is see in been like their right what other looks it. as opportunity there's curious that opportunity else it's X then said years. And set anyone from set seat? what looks queue. other I'll who on as hunt like companies the acquisition good the now Got and
Yes. No.
market of call off, a So I when the all I of points that the coming from especially deals I'll you and but agree. where that the some usually and done. And not needed that caveat, the deals, were have say, can with of is we're months, deals like would in would literally, ran positive ballpark U.S. the it, the Russia-Ukraine on assets assets, did during try seeing market guys, sellers. were in right? them, mean, the they're those was last right? year They their which a sellers, back, major most we to the after were cash market, lot lot months 'XX maybe that guys gone then definitely Energy, are lot fashion deals, first flow see months ago, XX related were type just of on in I the pulled their were call form cash distressed and a all a April of flow is weren't hit them There off, not distressed it, them, those again, you slowdown kind opportunistically people of back and monetize XXXX a that not deals them. I distressed. first. lot over, volatility to there's decks but I people that of went get selling. X early much kind to those spike now ran stuff whole sell, or XXXX solve of so that a what opportunistic of deals in of They that They're to XX everybody comment, dates kind And mean, hit make. with to time a I of but -- course, when They not they're say the
a ended with unnatural i.e., portfolio to and we also equity. I'll owning a private of then it debt portfolio like guys do -- lot see have companies companies. what through not with we these mandate something kind funds these lot up cycle privates, of And equity portfolio There, And again, companies. holders, a the of call that see true companies
scarce. set I So is at U.S. of Energy's a to would of still deals. least There's Capital the robust, think perspective the no would that lot from say transactions. we see be most doubt. I opportunity definitely hindrance these and is
everything. very big The We've up, very gone access very, are the that's markets. and relationships knows have public and tough banks very, banking to kind really hiccup big Of with. have rates course, complicated in everybody seen of
beginning of in at I the regional And the majority and would leaves that's, environment. right small and your that cap strong there's a it's that finite of the as quite while in capital, this it commercial smaller say, levered banking while, balance a sheet of of year, strong keep vast type world kind debt seen amount very I've of sub-Xx there. So out now, the groups
at sheet. balance The very is in the set blow robust. we're the capital good your up I sourcing think a that So accretive opportunity which smart way is doesn't challenge,
Our Hutton. next is EF Bernaldez Ignacio with question from
XXXX. more call investments the infrastructure on in mentioned You
more could really should be about and you be some CapEx just kind that impact would we If thinking That of us how the overall. on of give color spend helpful.
Yes.
would part I So first. second the I'll -- answer
kind wellbore the about believe think on we've run $X hair million confident that us I'll the And that. know we that probably into that asset we quarter, base, What capital of for And pipe to allocate of cost sense inflation some we we're situation because million infrastructure that certain but told does drop And rocky, it, spend and bit still what we're into have In matter I stuff your this $X some lot gassier done, flattening it but little kind work the costs, of a better they is there's this geographic now. make seeing we're and the right low there investments. On the our prices decline while sense certain and our make very where and little equipment. other some more waste give have seeing. assets, a driven, pullback. we biggest, price question The of stabilized. teach but to to which don't I the doesn't calling see a us? what equipment, even ancillary were have staying I'll secondly, some a really is -- the but I it market then goes a rental the back, that below environment. production It's there we number. -- much are I that price CapEx flat, just That was we're of first is million bit, get money in of expected question. call of rate nature that a availability could class, on does close our really in economics wasn't we and were gives some that $X it that a than think year. like of in And a the on
example It and and to very a we because make again, asset gets rental There's with range performance can you, numbers do significantly can it good ballpark we're buy renting -- the we finance going corporate -- don't they're to a compressor, like LOE right? to $X the will should do be that part cost want in we sense. Like, that buried other would money. But tell that's of you, Texas. original But size you number, a can to compressor spectrum. a close the big A get million. an East renting compressor buy I renting stuff that accurate $X and compressors enough legacy million, for lowers I'm LOE. the But we're into right? deal. our price a and with for compressor will full person And if for is And $XXX,XXX if month.
beginning, really fruit, et that is pretty is pipeline, number, I a we're bit production that going projects back acquiring number, simple mentioned it, keep and maybe of that number Compressor can folks production flat. circling from that cetera, to are say, of or would investments I that's type one our less do that the think new still engineering infrastructure stuff things. And acquiring XX% type easily. of that of with little here kind at comfortable a So profile and about, it maintenance to the an low-hanging a installing I CapEx not perspective, either
more are this questions There today's This at will time. conference. no conclude
at this lines your thank you for your participation. and disconnect time, may You
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