Q1 2022 Gulfport Energy Corp Earnings Call

May 4, 2022

Hello, and welcome to the Gulfport Energy Corporation first quarter 2022 earnings conference call and webcast. At this time all participants are in a listen only mode.

Operator: Hello, and welcome to the Gulfport Energy Corporation First Quarter 2022 Earnings Conference Call and Webcast. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Jessica Antle, Director of Investor Relations. Jessica, please go ahead.

Hello and welcome to the Gulfport Energy Corporation first quarter 2022 earnings conference calling webcast. At this time, all participants are in listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Jessica Antle, Director of Investor Relations. Jessica, please go ahead. Jessica, please go ahead.

Sure and answer session will follow the formal presentation.

Once you require operator assistance. Please press star zero on your telephone keypad. As a reminder, this conference is being recorded its now my pleasure to turn the call over to Jessica Antle director of Investor Relations. Jessica. Please go ahead.

Thank you and good morning, welcome to Gulfport Energy Corporation's first quarter 2022 earnings Conference call I Am Jessica Antle speakers on today's call include Tim cut Chief Executive Chief Executive Officer, and Bill BZ Executive Vice President and Chief Financial Officer, I would like to remind everybody that during this conference call. The participants May me.

Jessica Antle: Thank you and good morning. Welcome to Gulfport Energy Corporation's Q1 2022 earnings conference call. I am Jessica Antle. Speakers on today's call include Tim Cutt, Chief Executive Officer, and William Buese, Executive Vice President and Chief Financial Officer. I would like to remind everybody that during this conference call, the participants may make certain forward-looking statements relating to the company's financial condition, results of operations, plans, objectives, future performance, and business. We caution you that the actual results could differ materially from those that are indicated in these forward-looking statements due to a variety of factors. Information concerning these factors can be found in the company's filings with the SEC. In addition, we may reference non-GAAP measures. Reconciliations to the comparable GAAP measures will be posted on our website.

Jessica Antle: Thank you and good morning. Welcome to Gulfport Energy Corporation's Q1 2022 earnings conference call. I am Jessica Antle. Speakers on today's call include Tim Cutt, Chief Executive Officer, and Bill Buese, Executive Vice President and Chief Financial Officer. I would like to remind everybody that during this conference call, the participants may make certain forward-looking statements relating to the company's financial condition, results of operations, plans, objectives, future performance, and business. We caution you that the actual results could differ materially from those that are indicated in these forward-looking statements due to a variety of factors. Information concerning these factors can be found in the company's filings with the SEC.

Thank you and good morning. Welcome to Gulfport Energy Corporation's first quarter 2022 earnings conference call. I am Jessica Anfel. Speakers on today's call include Tim Cutt, Chief Executive Officer, and Bill Beese, Executive Vice President and Chief Financial Officer.

I would like to remind everybody that during this conference call, the participants may make certain forward-looking statements relating to the company's financial condition, results of operations, plans, objectives, future performance, and business. We caution you that the actual results could differ materially from those that are indicated in these forward-looking statements due to a variety of factors. Information concerning these factors can be found in the company's filings with the SEC.

Certain forward looking statements relating to the company's financial condition results of operations plans objectives future performance and business. We caution you that the actual results could differ materially from those that are indicated in these forward looking statements due to a variety of factors information concerning these factors can be found in the company's filings with the SEC.

In addition, we may reference non-GAAP measures. Reconciliations to the comparable GAAP measures will be posted on our website. An updated Goldport presentation was posted yesterday evening to our website in conjunction with the earnings announcement. Please review at your leisure. At this time, I would like to turn the call over to Tim.

Jessica Antle: In addition, we may reference non-GAAP measures. Reconciliations to the comparable GAAP measures will be posted on our website. An updated Gulfport presentation was posted yesterday evening to our website in conjunction with the earnings announcement. Please review at your leisure. At this time, I would like to turn the call over to Tim.

Additionally, we may reference non-GAAP measures reconciliations to comparable GAAP measures will be posted on our website.

Jessica Antle: An updated Gulfport presentation was posted yesterday evening to our website in conjunction with the earnings announcement. Please review at your leisure. At this time, I would like to turn the call over to Tim.

An updated Gulfport presentation was posted yesterday evening to our website in conjunction with the earnings announcement. Please review at your leisure at this time I would like to turn the call over to Tim.

Thanks Jessica and good morning and thank you for joining the call. I will begin this morning with a summary of the first quarter highlights, followed by an operational update before turning the call to Bill to discuss the financials. As you saw from our release, we had a very strong quarter, delivering over 1 billion cubic feet equivalent of gas per day and $117 million of free cash flow. We exited the quarter with a leverage ratio of 0.7 and liquidity of 568 million.

Tim Cutt: Thanks, Jessica, and good morning and thank you for joining the call. I will begin this morning with a summary of the Q1 highlights, followed by an operational update before turning the call to Bill to discuss the financials. As you saw from our release, we had a very strong quarter, delivering over 1 billion cubic feet equivalent of gas per day and $117 million of free cash flow. We exited the quarter with a leverage ratio of 0.7 and liquidity of $568 million. We began executing our share buyback program and the board has recently approved an additional $100 million, taking the program to $200 million, which represents approximately 50% of expected free cash flow.

Thanks, Jessica and good morning, and thank you for joining the call I will begin this morning with a summary of the first quarter highlights followed by an operational update before turning the call to bill to discuss the financials. As you saw from our release, we had a very strong quarter delivering over 1 billion cubic feet equivalent of gas per day and $117 million of free cash flow.

We exited the quarter with a leverage ratio of <unk>, seven and liquidity of $568 million.

We began executing our share buyback program and the board has recently approved an additional $100 million taking the program to $200 million which represents approximately 50% of expected free cash flow.

We began executing our share buyback program and the board has recently approved an additional $100 million taking.

Taking the program the 200 million, which represents approximately 50% of expected free cash flow.

Turning to production, our strong first quarter production was driven by the continued outperformance of our 2021 development program, excellent uptime during the winter months, and the addition of five new scoop wells performing above expectations.

Tim Cutt: Turning to production, our strong Q1 production was driven by the continued outperformance of our 2021 development program, excellent uptime during the winter months, and the addition of 5 new Scoop wells performing above expectations. Given the timing of our development program, we expect production to decline in Q2 and Q3 before growing significantly during Q4. As previously mentioned, we have moved to a continuous drilling program in the Utica, which is expected to support modest year-on-year production growth and a more consistent production profile moving forward. With the encouraging well results in the Scoop, we will also consider adding additional activity in H2 next year to help drive operational efficiencies and to retain critical crews and equipment.

Turning to production our strong first quarter production was driven by the continued outperformance of our 2021 development program excellent uptime during the winter months and the addition of five new Scoop wells performing above expectations, given the time of our development program. We expect production to decline in the second and third quarters before growing significantly during.

Given the time of our development program, we expect production to decline in the second and third quarters before growing significantly during the fourth quarter. As previously mentioned, we have moved to a continuous drilling program in the East which is expected to support modest year-on-year production growth and a more consistent production profile moving forward.

In the fourth quarter as previously mentioned, we have moved to a continuous drilling program in the east which is expected to support modest year on year production growth and a more consistent production profile moving forward with the encouraging well results in the Scoop. We will also consider adding additional activity in the second half of the year next year to help drive <unk>.

With the encouraging well results in the scoop, we will also consider adding additional activity in the second half of the year next year to help drive operational efficiencies and to retain critical crews and equipment. Overall, we expect to grow production year on year by more than 5% and stay above 1 billion cubic feet equivalent per day throughout 2023.

Operational efficiencies and to retain critical crews and equipment overall, we expect to grow production year on year by more than 5% and stay above 1 billion cubic feet equivalent per day throughout 2023.

Tim Cutt: Overall, we expect to grow production year-on-year by more than 5% and stay above 1 billion cubic feet equivalent per day throughout 2023. Turning to our development program, I'm pleased to report that our results in both the Scoop and Utica continue to outperform historical wells. We remain focused on delivering peer leading development cost for MCFE, and our implementation of wider spacing and more intensive completion designs is yielding strong results. On the back of these strong results, we see opportunities to increase our land position in the Utica, leading to sustainable organic growth, which presents a path to additional production growth beyond what is currently contemplated. During the quarter, we turned in line 5 wells from the Nelda pad in the Scoop.

Turning to our development program, I'm pleased to report that our results in both the SCOOP and UTICA continue to outperform historical wells. We remain focused on delivering peer-leading development costs for MCFE, and our implementation of wider spacing and more intensive completion designs is yielding strong results. On the back of these strong results, we see opportunities to increase our land position in the UTICA, leading to sustainable organic growth, which presents a path to additional production growth beyond what is currently contemplated.

Turning to our development program I am pleased to report that our results in both the Scoop and Utica continue to outperform historical wells, we remain focused on delivering peer leading development cost per mcf and our implementation of wider spacing and more intensive completion designs is yielding strong results on the back of these strong results, we see opportunities to increase our land position.

In the Utica, leading to sustainable organic growth, which presents a path to additional production growth beyond what is currently contemplated during.

During the quarter, we turned in line five wells from the Nelda pad in the scoop. Building on the strong results we were experiencing in the Utica, we used a similar design approach optimizing the completion pump to well spacing and desired recovery.

During the quarter, we turned in line five wells from the Nelda pad in the Skus building on the strong results. We were experienced in the Utica, we used a similar design approach optimizing the completions pumped to well spacing and desired recoveries. This has resulted in higher flowing pressures higher rates and more sustained production unexpected and even stronger than our recent <unk>.

Tim Cutt: Building on the strong results we were experiencing in the Utica, we used a similar design approach, optimizing the completion, pump-to-well spacing and desired recoveries. This has resulted in higher flowing pressures, higher rates, and more sustained production than expected, and even stronger than our recent 2021 turn-in-line wells. These strong results support our overall development approach, and we are excited about what it means for our follow-up SCOOP STACK and O'Neill developments scheduled to come online later this year. In the Utica, we did experience a casing failure while fracking a well on our Charlotte pad. The casing, it appears, to have failed in the seam of the 5.5-inch welded pipe.

This has resulted in higher flowing pressures, higher rates, and more sustained production than expected, and even stronger than our recent 2021 Turn In Line wells. These strong results support our overall development approach and we are excited about what it means for our follow-up SCOOP, SCR, and O'Neill developments scheduled to come online later this year.

'twenty one turn in line wells. These strong results support our overall development approach and we are excited about what it means for our follow ups Scoop SCR and O'neil developments scheduled to come online later this year in the Utica, we did experience a casing failure, while fracking a well on our Charlotte pad the casing appears to have them.

In the Utica, we did experience a casing failure while fracking a well on our Charlotte pad. The casing appears to have failed in the seam of the 5.5 inch welded pipe. We have run 4.5 inch liners in each of the three completed Charlotte wells and out of an abundance of caution, we are in the process of running liners in three additional wells on the Clark pad that contain similar pipe from the same shipment.

Sales in the seam of the five and a half inch welded pipe, we've run four and a half inch liners in each of the three completed Charlotte wells and out of an abundance of caution we are in the process of running liners and three additional wells on the clock pad. The contained similar pipe from the same shipment. When this happened we released the Frac crew and do not expect to get the crude back to <unk>.

Tim Cutt: We have run 4.5-inch liners in each of the 3 completed Charlotte wells, and out of an abundance of caution, we are in the process of running liners in 3 additional wells on the Clark pad that contain similar pipe from the same shipment. When this happened, we released the frack crew and do not expect to get the crew back to complete the 3 remaining Clark wells for several months, which may put pressure on our ability to achieve the higher end of our production guidance range. We will understand the frack schedule much better by the time of our Q2 call in August and will provide further updates at that time. We would note that this impact is purely timing and should not impact the planned exit rate in 2022.

When this happened, we released the frack crew and do not expect to get the crew back to complete the three remaining Clark Wells for several months, which may put pressure on our ability to achieve the higher end of our production guidance range.

Fleets of three remaining Clark wells for several months, which may put pressure on our ability to achieve the higher end of our production guidance range, we will understand the frac scheduled much better by the time of our second quarter call in August and we'll provide further updates at that time, we would note that this impact is purely timing and should not impact the planned exit.

We will understand the FRAC schedule much better by the time of our second quarter call in August and will provide further updates at that time. We would note that this impact is purely timing and should not impact the planned exit rate in 2022.

In 2022.

On capital, the repair work on the previously discussed casing remediation in the Utica has pushed us to the higher end of our original capital guidance range. In addition, we are experiencing inflationary pressures above our original assumptions of 10%.

Tim Cutt: On capital, the repair work on the previously discussed casing remediation in the Utica has pushed us to the higher end of our original capital guidance range. In addition, we are experiencing inflationary pressures above our original assumptions of 10%. Fuel, sand, and pipe costs have moved up substantially, and due to being on short-term contracts, we have seen increases in rig and frack rates. As a result, we are now expecting inflation to be 15% to 20%. Together, these items have resulted in updating the midpoint of our capital guidance to $400 million in the current environment. However, improvements in price have more than offset this impact, resulting in an increase of our forecasted free cash flow in 2022.

On capital the repair work on the previously discussed casing remediation in the Utica has pushed us to the higher end of our original capital guidance range. In addition, we are experienced inflationary pressures above our original assumptions of 10% fuel sand and pipe costs have moved up substantially and due to being on short term contracts, we have seen increases in rig and frac.

Fuel, sand, and pipe costs have moved up substantially, and due to being on short-term contracts, we have seen increases in rig and frack rates. As a result, we are now expecting inflation to be 15 to 20 percent. Together, these items have resulted in updating the midpoint of our capital guidance to $400 million in the current environment. However, improvements in price have more than offset this impact, resulting in an increase of our forecasted free cash flow in 2022.

As a result, we're now expecting inflation to be 10% to 15% to 20% together. These items have resulted in updating the midpoint of our capital guidance to $400 million in the current environment, However, improvements and pricing more than offset this impact impact, resulting in an increase of our forecasted free cash flow in 2022.

We continue to focus on improving our total per unit operating costs and are identifying improvement efficiencies across the company. We delivered a total operating cost of $1 26 per Mcf, which represents a slight increase from 2021, primarily due to increased production taxes and a seasonal increase in L. A we especially associated with winter rising.

We continue to focus on improving our total per-unit operating costs and are identifying improvement efficiencies across the company. We delivered a total operating cost of $1.26 per MCFE, which represents a slight increase from 2021, primarily due to increased production taxes and a seasonal increase in LOE associated with winterizing our equipment, increased water hauling driven by recent turn-in lines, and the addition of compression to help offset base declines.

Tim Cutt: We continue to focus on improving our total per unit operating costs and are identifying improvement efficiencies across the company. We delivered a total operating cost of $1.26 per MCFE, which represents a slight increase from 2021, primarily due to increased production taxes and a seasonal increase in LOE associated with winterizing our equipment, increased water hauling driven by recent turn in lines, and the addition of compression to help offset base declines. In summary, we remain focused on cost-effective production, capital discipline, and delivering peer-leading development costs per MCFE. We have implemented wider spacing and more intensive completion designs, which continue to deliver strong results. Our low leverage, along with significant free cash flow, should allow us to organically grow the business while returning significant capital to our shareholders.

Our equipment increased water hauling driven by recent turn in lines and the addition of compression to help offset based base declines.

In summary, we remain focused on cost-effective production, capital discipline, and delivering peer-leading development costs for MCFE. We have implemented wider spacing and more intensive completion designs, which continue to deliver strong results.

In summary, we remain focused on cost effective production capital discipline, and delivering peer leading development cost per Mcf E. We have implemented wider spacing and more intensive completion designs, which continued to deliver strong results our low leverage along with significant free cash flow should allow us to organically grow the business, while returning significant.

Tim Cutt: Our low leverage, along with significant free cash flow, should allow us to organically grow the business while returning significant capital to our shareholders. I'm pleased to be increasing our share repurchase program by $100 million, which has the company returning approximately 50% of 2022 expected free cash flow to shareholders. I'll now turn the call over to Bill to discuss the financial results.

Our low leverage, along with significant free cash flow, should allow us to organically grow the business, while returning significant capital to our shareholders. I'm pleased to be increasing our share repurchase program by $100 million, which has the company returning approximately 50% of 2022 expected free cash flow to shareholders.

Capital to our shareholders I am pleased to be increasing our share repurchase program by $100 million.

Tim Cutt: I'm pleased to be increasing our share repurchase program by $100 million, which has the company returning approximately 50% of 2022 expected free cash flow to shareholders. I'll now turn the call over to Bill to discuss the financial results.

Which has the company returning approximately 50% of 2022 expected free cash flow to shareholders I'll now turn the call over to bill to discuss the financial results.

I'll now turn the call over to Bill to discuss the financial results.

Thank you Tim and good morning, everyone as Tim suggested in his remarks, we had another solid quarter on both the operational and financial fronts, largely driven by the continued outperformance of our 2021 development program and supported by a strong commodity price environments.

William Buese: Thank you, Tim, and good morning, everyone. As Tim suggested in his remarks, we had another solid quarter on both the operational and financial fronts, largely driven by the continued outperformance of our 2021 development program and supported by a strong commodity price environment. I'll now take a few minutes to provide a high-level overview of our Q1 financial results, an update on our improved liquidity position, spring redetermination process, and return of capital initiatives before opening the call up for Q&A. For the three-month period ended 31 March 2022, we reported a net loss of $492 million and generated $235 million in adjusted EBITDA.

Bill Buese: Thank you, Tim, and good morning, everyone. As Tim suggested in his remarks, we had another solid quarter on both the operational and financial fronts, largely driven by the continued outperformance of our 2021 development program and supported by a strong commodity price environment. I'll now take a few minutes to provide a high-level overview of our Q1 financial results, an update on our improved liquidity position, spring redetermination process, and return of capital initiatives before opening the call up for Q&A. For the three-month period ended 31 March 2022, we reported a net loss of $492 million and generated $235 million in adjusted EBITDA.

Thank you, Tim. And good morning, everyone. As Tim suggested in his remarks, we had another solid quarter on both the operational and financial fronts, largely driven by the continued outperformance of our 2021 development program and supported by a strong commodity price environment.

I'll now take a few minutes to provide a high-level overview of our first quarter financial results and update on our improved liquidity position, spring redetermination process, and return of capital initiatives before opening the call up for Q&A.

I'll now take a few minutes to provide a high level overview of our first quarter financial results and update on our improved liquidity position spring Redetermination process and return of capital initiatives before opening the call up for Q&A.

For the three months period ended March 31, 2022, we reported a net loss of $492 million and generated $235 million and adjusted EBITDA.

For the three month period ended March 31, 2022, we reported a net loss of $492 million and generated $235 million to adjusted EBITDA. A $664 million unrealized loss associated with a commodity derivatives portfolio, driven by the large increase in commodity prices during the quarter, was the key driver of the net loss for the period.

William Buese: A $664 million unrealized loss associated with our commodity derivatives portfolio, driven by the large increase in commodity prices during the quarter, was the key driver of the net loss for the period. Net cash provided by operating activities totaled $254 million during Q1, and we generated free cash flow of $117 million for the same period. We used the majority of our free cash flow to repay borrowings on our credit facility and to fund our ongoing common share repurchase program. On the derivative front, we entered into commodity derivative contracts during Q1 to opportunistically hedge and lock in future free cash flow generation.

Bill Buese: A $664 million unrealized loss associated with our commodity derivatives portfolio, driven by the large increase in commodity prices during the quarter, was the key driver of the net loss for the period. Net cash provided by operating activities totaled $254 million during Q1, and we generated free cash flow of $117 million for the same period. We used the majority of our free cash flow to repay borrowings on our credit facility and to fund our ongoing common share repurchase program. On the derivative front, we entered into commodity derivative contracts during Q1 to opportunistically hedge and lock in future free cash flow generation.

$664 million unrealized loss associated with our commodity derivatives portfolio driven by the large increase in commodity prices during the quarter was the key driver of the net loss for the period.

Net cash provided by operating activities totaled $254 million during the first quarter, and we generated free cash flow of $117 million for the same period.

Net cash provided by operating activities totaled $254 million during the first quarter and we generated free cash flow of $117 million for the same period.

We use the majority of our free cash flow to repay borrowings on our credit facility and to fund our ongoing common share repurchase program.

We used the majority of our free cash flow to repay borrowings on our credit facility and to fund our ongoing common share repurchase program.

On the derivative front, we entered into commodity derivative contracts during the first quarter to opportunistically hedge and lock in future free cash flow generation.

William Buese: As of 2 May, we had natural gas swap and collar contracts totaling approximately 621 million cubic feet per day at an average floor price of $2.66 per Mcf for 2022, and natural gas swap and collar contracts totaling approximately 450 million cubic feet per day at an average floor price of $3.19 per Mcf for 2023. We also began layering in derivatives for 2024 and currently have natural gas swap contracts totaling approximately 35 million cubic feet per day at an average floor price of $3.77 per Mcf. Finally, we continue to restructure a portion of our 2023 sold call positions to provide additional capacity to layer in incremental swap and collar contracts.

Bill Buese: As of 2 May, we had natural gas swap and collar contracts totaling approximately 621 million cubic feet per day at an average floor price of $2.66 per Mcf for 2022, and natural gas swap and collar contracts totaling approximately 450 million cubic feet per day at an average floor price of $3.19 per Mcf for 2023. We also began layering in derivatives for 2024 and currently have natural gas swap contracts totaling approximately 35 million cubic feet per day at an average floor price of $3.77 per Mcf. Finally, we continue to restructure a portion of our 2023 sold call positions to provide additional capacity to layer in incremental swap and collar contracts.

As of May 2nd, we had natural gas swap and collar contracts totaling approximately 621 million cubic feet per day and an average floor price of $2.66 per MCF for 2022.

As of May 2nd we had natural gas swap and collared contracts totaling approximately 621 million cubic feet per day at an average floor price of $2 66 per Mcf for 2022.

and natural gas swap and collar contracts totaling approximately 450 million cubic feet per day at an average floor price of $3.19 per MCF for 2023.

And natural gas swap and colored contracts totaling approximately 450 million cubic feet per day at an average floor price of $3 19 per Mcf for 2023.

We also began layering in derivatives for 2024 and currently have natural gas swap contracts totaling approximately 35 million cubic feet per day at an average floor price of $3.77 per MCF.

We also began layering in derivatives for 2024, and currently have natural gas swap contracts totaling approximately 35 million cubic feet per day at an average floor price of $3 77 per Mcf.

Finally, we continue to restructure a portion of our 2023 sold call positions to provide additional capacity to layer in incremental swap and collar contracts.

Finally, we continue to restructure a portion of our 2023 sold call positions to provide additional capacity to layer in incremental swapping collar contracts all of the contracts associated with the restructuring have been included in the derivative table in the 10-Q and were included in the updated numbers I shared earlier please.

William Buese: All the contracts associated with the restructurings have been included in the derivative table in the 10-Q and were included in the updated numbers I shared earlier. Please see our Form 10-Q for additional details on our portfolio. Turning to our balance sheet. At the end of Q1, total assets were approximately $2.2 billion, while total gross debt was approximately $575 million, consisting of $25 million outstanding under our revolver and $550 million of outstanding senior notes. We also had $6 million of cash on hand and $113 million of letters of credit outstanding at the end of the quarter.

Bill Buese: All the contracts associated with the restructurings have been included in the derivative table in the 10-Q and were included in the updated numbers I shared earlier. Please see our Form 10-Q for additional details on our portfolio. Turning to our balance sheet. At the end of Q1, total assets were approximately $2.2 billion, while total gross debt was approximately $575 million, consisting of $25 million outstanding under our revolver and $550 million of outstanding senior notes. We also had $6 million of cash on hand and $113 million of letters of credit outstanding at the end of the quarter.

All of the contracts associated with the restructurings have been included in the derivative table in the 10-Q and were included in the updated numbers I shared earlier.

Please see our Form 10-Q for additional details on our portfolio.

Please see our form. Thank you for additional details on our portfolio

Turning to our balance sheet at the end of the first quarter total assets were approximately $2 2 billion.

Turning to our balance sheet, at the end of the first quarter, total assets were approximately $2.2 billion, while total gross debt was approximately $575 million, consisting of $25 million outstanding under our revolver and $550 million of outstanding senior notes. We also had $6 million of cash on hand and $113 million of letters of credit outstanding at the end of the quarter.

Our total gross debt was approximately $575 million consisting of $25 million outstanding under our revolver and $550 million of outstanding Senior notes. We also had $6 million of cash on hand, and $113 million of letters of credit outstanding at the end of the quarter.

On the liquidity front, we exited the first quarter with approximately $568 million of total liquidity made up of $6 million of cash and $562 million available under the revolvers.

On the liquidity front, and we exited the first quarter with approximately $568 million of total liquidity made up of 6 million of cash and $562 million available under the revolver.

William Buese: On the liquidity front, we exited Q1 with approximately $568 million of total liquidity made up of $6 million of cash and $562 million available under the revolver. We recently completed our spring borrowing base redetermination process, and effective May 2, we entered into the first amendment to the credit agreement governing our credit facility. Our lenders approved an increase in our borrowing base from $850 million to $1 billion, while we chose to keep the elected lender commitments at $700 million. We believe the increased borrowing base reflects the strength of our assets, our improved balance sheet, and the current commodity market. In addition, the amendment eased certain requirements and limitations related to hedging, amended the covenants governing certain restricted payments, and provides for the transition from a LIBOR to a SOFR benchmark.

Bill Buese: On the liquidity front, we exited Q1 with approximately $568 million of total liquidity made up of $6 million of cash and $562 million available under the revolver. We recently completed our spring borrowing base redetermination process, and effective May 2, we entered into the first amendment to the credit agreement governing our credit facility. Our lenders approved an increase in our borrowing base from $850 million to $1 billion, while we chose to keep the elected lender commitments at $700 million. We believe the increased borrowing base reflects the strength of our assets, our improved balance sheet, and the current commodity market. In addition, the amendment eased certain requirements and limitations related to hedging, amended the covenants governing certain restricted payments, and provides for the transition from a LIBOR to a SOFR benchmark.

We recently completed our spring borrowing base Redetermination process and effective may 2nd we entered into the first amendment to the credit agreement governing our credit facility, our lenders approved an increase in our borrowing base from 852 1 billion.

We recently completed our spring borrowing base determination process, and effective May 2nd, we entered into the first amendment to the credit agreement governing our credit facility. Our lenders approved an increase in our borrowing base from $850 to $1 billion, while we chose to keep the elected lender commitments at $700 million. We believe the increased borrowing base reflects the strength of our assets, our improved balance sheet, and the current commodity market.

While we chose to keep the elected lender commitments at $700 million.

We believe the increased borrowing base reflects the strength of our assets, our improved balance sheet and the current commodity market.

In addition, the amendment eased certain requirements and limitations related to hedging, amended the covenants governing certain restricted payments, and provides for the transition from a LIBOR to a SOFR benchmark.

In addition, the amendment E certain requirements and limitations related to hedging amended the covenants governing certain restricted payments and provides for the transition from a LIBOR to a software benchmark.

Overall, we think the Redetermination and amendment of our extremely positive outcomes for the company.

William Buese: Overall, we think the redetermination and amendment were extremely positive outcomes for the company. On the return of capital front, as indicated during our Q4 earnings call, we began executing on our initial $100 million common share repurchase program during the quarter. As of 31 March, we have repurchased approximately 438,000 common shares at an average price of $80.16 for a total cost of $35.5 million. Subsequent to the end of the quarter, we continued to repurchase shares, and as of 2 May, we had repurchased approximately 748,000 common shares in total at an average price of $84.26 for a total cost of $63 million. This left approximately $37 million under our original common share repurchase authorization.

Bill Buese: Overall, we think the redetermination and amendment were extremely positive outcomes for the company. On the return of capital front, as indicated during our Q4 earnings call, we began executing on our initial $100 million common share repurchase program during the quarter. As of 31 March, we have repurchased approximately 438,000 common shares at an average price of $80.16 for a total cost of $35.5 million. Subsequent to the end of the quarter, we continued to repurchase shares, and as of 2 May, we had repurchased approximately 748,000 common shares in total at an average price of $84.26 for a total cost of $63 million. This left approximately $37 million under our original common share repurchase authorization.

Overall, we think the redetermination and amendment were extremely positive outcomes for the company.

On the return of capital front as indicated during our fourth quarter earnings call. We began executing on our initial $100 million common share repurchase program during the quarter.

On the return of capital front, as indicated during our fourth quarter earnings call, we began executing on our initial $100 million common share repurchase program during the quarter.

As of March 31st, we have repurchased approximately 438,000 common shares at an average price of $80.16 for a total cost of $35.5 million.

As of March 31, we have repurchased approximately 438000 common shares at an average price of $80 16 for a total cost of $35 5 million.

Subsequent to the end of the quarter, we continued to repurchase shares and as of May 2nd we had repurchased approximately 748000 common shares in total at an average price of $84 26 for.

Subsequent to the end of the quarter, we continued to repurchase shares, and as of May 2nd, we had repurchased approximately 748,000 common shares in total at an average price of $84.26 for a total cost of $63 million.

Total cost of $63 million.

This left approximately $37 million under our original common share repurchase authorization.

As Tim just mentioned in his comments, the board authorized an additional $100 million to be added to our common share repurchase program. The increase provides for a total of $200 million of our common shares to be repurchased through December 31st of this year.

William Buese: As Tim just mentioned in his comments, the board authorized an additional $100 million to be added to our common share repurchase program. The increase provides for a total of $200 million of our common shares to be repurchased through 31 December 2024. The increased repurchase program represents approximately 50% of our free cash flow generation in 2022, and when combined with the shares already repurchased, approximately 10% of our outstanding common shares have executed at today's share price. As was the case with the initial authorization, the timing and amount of any share repurchases continues to be subject to available liquidity, market conditions, applicable legal requirements, and other factors.

Bill Buese: As Tim just mentioned in his comments, the board authorized an additional $100 million to be added to our common share repurchase program. The increase provides for a total of $200 million of our common shares to be repurchased through 31 December 2024. The increased repurchase program represents approximately 50% of our free cash flow generation in 2022, and when combined with the shares already repurchased, approximately 10% of our outstanding common shares have executed at today's share price. As was the case with the initial authorization, the timing and amount of any share repurchases continues to be subject to available liquidity, market conditions, applicable legal requirements, and other factors.

As Tim just mentioned in his comments the board authorized an additional 100 million to be added to our common share repurchase program. The increase provides for a total of $200 million of our common shares to be repurchased through December 31 of this year.

The increase repurchase program represents approximately 50% of our free cash flow generation in 'twenty, two and when combined with the shares already repurchased approximately 10% of our outstanding common shares of executed at today's share price.

The increased repurchase program represents approximately 50% of our free cash flow generation in 22, and when combined with the shares already repurchased, approximately 10% of our outstanding common shares have executed at today's share price.

As was the case with the initial authorization, the timing and amount of any share repurchases continues to be subject to available liquidity, market conditions, applicable legal requirements, and other factors.

As was the case with the initial authorization the timing and amount of any share repurchases continues to be subject to available liquidity market conditions applicable legal requirements and other factors. We will continue to evaluate all of our future return of capital options, including continuing to increase the size of our share repurchase program potentially addressing.

We will continue to evaluate all of our future return of capital options, including continuing to increase the size of our share repurchase program, potentially addressing the preferred shares, and instituting a common share dividend.

William Buese: We will continue to evaluate all of our future return of capital options, including continuing to increase the size of our share repurchase program, potentially addressing the preferred shares, and instituting a common share dividend. In summary, we continue to generate significant free cash flow, which has allowed us to pay down the majority of our credit facility and to begin executing on our stock repurchase program. Our outlook for free cash flow continues to improve despite the growing inflationary effects that has led to an increased capital spend for 2022. We continue to believe that our efficient asset base supports a low reinvestment rate that will allow us to continue returning capital to shareholders while maintaining a strong production portfolio, financial position, and leverage below 1x. With that, we will now open the call up for questions.

Bill Buese: We will continue to evaluate all of our future return of capital options, including continuing to increase the size of our share repurchase program, potentially addressing the preferred shares, and instituting a common share dividend. In summary, we continue to generate significant free cash flow, which has allowed us to pay down the majority of our credit facility and to begin executing on our stock repurchase program. Our outlook for free cash flow continues to improve despite the growing inflationary effects that has led to an increased capital spend for 2022. We continue to believe that our efficient asset base supports a low reinvestment rate that will allow us to continue returning capital to shareholders while maintaining a strong production portfolio, financial position, and leverage below 1x. With that, we will now open the call up for questions.

The preferred shares and instituting a common share dividend.

In summary, we continue to generate significant free cash flow, which has allowed us to pay down the majority of our credit facility and to begin executing on our stock repurchase program. Our outlook for free cash flow continues to improve, despite the growing inflationary effects that has led to an increased capital spend for 2022. We continue to believe that our efficient asset base supports a low reinvestment rate that will allow us to continue returning capital to shareholders while maintaining a strong production portfolio, financial position, and leverage below one time. With that, we will now...

We continue to believe that our efficient asset base supports a low reinvestment rate that will allow us to continue returning capital to shareholders, while maintaining a strong production portfolio financial position and leverage below one times.

With that we will now open the call up for questions.

Operator: Thank you. We'll now be conducting a question-and-answer session. If you'd like to be placed into question queue, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing star one. One moment, please, while we poll for questions. Our first question today is coming from Neal Dingmann from Truist. Your line is now live.

Thank you, we will now be conducting a question and answer session. If you would like to be placed into question queue, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue.

Thank you, we'll now be conducting a question and answer session if you'd like to be placed in the question queue. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. You May press star two if you'd like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing star one.

For participants using speaker equipment it may be necessary to pick up your handset before pressing star 1. One moment please while we poll for questions.

One moment, please while we poll for questions.

Our first question today is coming from Neil Dingman from True History Line is now live.

Our first question today is coming from Neal Dingmann from Truest. Your line is now live.

Morning all, Tim. First question maybe just on asset allocation specifically. You guys continue to run a nice balanced program, just wondering if you continue, or if the market continues to see, you know, sort of service inflation and just, you know, pent up demand, would you all considering allocating, you know, maybe initially to the UTCAD and then to the Midcon in order to have, you know, a little bit more capital efficiency? Or, you know, I'm just wondering if you would consider that, or will the program continue to be sort of balanced?

Good morning, all Tim first question, maybe just on the asset allocation specifically.

Neal Dingmann: Morning, all. Tim, first question maybe just on asset allocation specifically. You guys continue to run a nice balanced program. Just wondering as you continue or if the market continues to see, you know, sort of service inflation and just, you know, pent-up demand, would you all considering allocating, you know, maybe initially to the Utica, then to the MidCon in order to have, you know, a little bit more capital efficiency? Or, you know, I'm just wondering if you would consider that, or will the program continue to be sort of balanced?

And you guys continue to run a nice balanced program. Just wondering if you continue or if the market continues to see sort of service inflation just pent.

Pent up demand would you all considering allocating maybe initially to the Utica than did the mid con in order to have a little bit more capital efficiency or I'm. Just wondering if you would consider that or will the program continue to be sort of balanced.

I mean, I think the program will continue to be balanced, but I do see, as I said in my remarks.

I mean, I think the program will continue to be balanced, but I do see as I said in my remarks, the opportunity to potentially go to a more continuous program in the scoop right now we have looking.

Tim Cutt: I mean, I think the program will continue to be balanced, but I do see, as I said in my remarks, the opportunity to potentially go to a more continuous program in the SCOOP. Right now, you know, looking in next year, we have drilling going on kind of through mid-year and then dropping that rig. We do see an opportunity with our inventory to carry that on. I think in the current market, I think having a continuous rig in the Utica and in the SCOOP will help us a lot. You know, dropping rigs, picking those back up, you know, moving multiple frack units in and out can become very problematic. I think when we talk about kind of organic growth is to keep kind of in that two rig type program.

the opportunity to potentially go to a more continuous program in the scoop.

Right now, we have, you know, looking in next year, we have drilling going on kind of through mid-year and then dropping that rig. We do see an opportunity with our inventory to carry that on. I think in the current market, I think having a continuous rig in the Utica and in the scoop will help us a lot. You know, dropping rigs, picking those back up, you know, moving multiple frac units in and out can become very problematic. So I think when we talk about kind of organic growth is to keep kind of in that two-rig type program.

Looking at next year, we have drilling going on kind of through mid year, and then dropping that rig we do see an opportunity with our inventory to carry that on I think in the current market, having a continuous rig in the Utica and scoop will help us a lot.

Dropping rigs picking those back up.

Moving multiple frac units in and out can become very problematic. So I think when we talk about kind of organic growth is to keep kind of in that in that two rig type program.

Yes.

Neal Dingmann: Okay. Then just lastly, I was interested on your comment on maybe looking at a little bit of acreage. You all seem to have, you know, one of the bigger acreage positions, especially when you look at both your plays. Just your thoughts, is that more just bolting on what you have or, you know, why even consider more, on addition? Maybe just talk about, again, either M&A or just, you know, maybe further expand on that comment that you had talked about acreage a little bit.

Okay, and then just lastly, I was interested on.

Okay. And then just lastly, I was interested in your comment on maybe looking at a little bit of acreage. You definitely, you all seem to have, you know, one of the bigger acreage positions, especially when you look at both your plays. Just your thoughts, is that more just bolting on what you have or, you know, why even consider more on a dish? Maybe just talk about, again, either M&A or just, you know, maybe further expand on that comment that you had talked about acreage a little bit.

Comment on maybe looking a little bit of acreage.

You all seem to have one of the bigger acreage position, especially when you look at both both plays.

Just your thoughts is that more just bolting on what you have or you know.

Why is considered more.

On the just maybe just talk about again, either M&A or just maybe further expand on that comment that you had talked about acreage a little bit yes.

Tim Cutt: Yeah. I think we've been saying, you know, the open acreage in the Utica. We see certainly additional acreage in the wet gas window. We see the ability to move that gas out of the basin. It is, you know, anything that we would pick up at these kind of prices, especially with the liquid prices being strong, would be extremely competitive in the portfolio. We're just looking at the most economic outcomes. So that's about as simple as it is, Neal.

Tim Cutt: Yeah. I think we've been saying, you know, the open acreage in the Utica. We see certainly additional acreage in the wet gas window. We see the ability to move that gas out of the basin. It is, you know, anything that we would pick up at these kinds of prices, especially with the liquid prices being strong, would be extremely competitive in the portfolio. We're just looking at the most economic outcomes. So that's about as simple as it is, Neal.

I think we've been we've been saying the open acreage in the Utica, we see.

Yeah, I think we've been, you know, we've been saying the open acreage in the Utica, we see certainly additional acreage in the wet gas window. We see, we see the ability to move that gas out of out of the basin.

Certainly additional acreage in the wet gas window, we see we see the ability to move that gas out of out of the basin. It is.

You know, anything that we would pick up at these kind of prices, especially with the liquid prices being strong, would be extremely competitive in the portfolio. And so we're just looking at the most economic outcomes. So that's that's about as simple as it is.

Anything that we would pick up at these kind of prices, especially with a liquid prices being strong wood.

It would be extremely competitive in the portfolio and so we're just looking at the most economic outcomes.

So that's about as simple as it is Neil.

And then I think it's the one third one, just just on the show returns. Great job on obviously starting on the buybacks, which is thoughts on would you mix in dividends anytime soon on that or maybe stick to buybacks given how steep the steep, cheap the stock continues to be. I'll turn up the bill.

Neal Dingmann: If I could throw one, third one, just on the shareholder returns. Great job on obviously starting on the buybacks. Just thoughts on would you mix in dividends anytime soon on that or maybe stick to buybacks given how cheap the stock continues to be?

And then just take its toll on the third one is just on the.

Sure Greg.

Job on known obviously, starting on the buybacks would just thoughts on what your mix in dividends anytime soon on that or maybe stick to buybacks given how cheap cheap cheap the stock continues.

Now I'll turn it to bill.

Tim Cutt: I'll turn it over to Bill.

Yeah, Neil, I mean, as I said, you know, we continue all, you know, we consider all our alternatives, but for the time being, the way our stock is still trading, you know, compared to the NAV and, you know, just our approved reserves for share, I think we'll still focus on, you know, share repurchase for the short term, you know, but, but everything's still on the table, Neil. We still, we discuss it every board meeting and frequently, internally, so. No, I agree with you, Bill.

William Buese: Yeah, Neal, I mean, as I said, you know, we consider all alternatives, but for the time being and the way our stock is still trading, you know, compared to the NAV and, you know, just our proved reserves per share, I think we'll still focus on, you know, share repurchase for the short term. You know, but everything's still on the table, Neal. We discuss it every board meeting and frequently internally, so.

Bill Buese: Yeah, Neal, I mean, as I said, you know, we consider all alternatives, but for the time being and the way our stock is still trading, you know, compared to the NAV and, you know, just our proved reserves per share, I think we'll still focus on, you know, share repurchase for the short term. You know, but everything's still on the table, Neal. We discuss it every board meeting and frequently internally, so.

Yes, Neil I mean, as I said, we continue all we considered all alternatives, but for the time being in the way our stock is still trading compared to the NAV in just our proved reserves per share I think we will still focus on share repurchase for the short term, but everything is still on the table. Naomi we spoke that we discussed at every board meeting and frequently.

<unk> internally so.

No I agree with you Bill take that glad to hear that thank you.

Neal Dingmann: No, I agree with you, Bill. Thanks. Glad to hear that. Thank you.

Tim Cutt: Thanks, Neal.

Thanks Neil.

Thank you. Next question today is coming from Zack Parl from JP Morgan. Your line is now live.

Thank you. Our next question today is coming from Zach <unk> from J P. Morgan Your line is now live.

Operator: Thank you. Next question today is coming from Zach Parham from JPMorgan. Your line is now live.

Hey, guys. Thanks for taking my question. Maybe if you could just give us a little more color on the casing failure you experienced at the Utica. You know, what do you think were the drivers of the issue? And, you know, maybe a little more on, you know, if you think this is something you could run into again in the future.

Hey, guys. Thanks for taking my question, maybe if you could just give us a little more color on the casing failure you experienced in the Utica.

Zach Parham: Hey, guys. Thanks for taking my question. Maybe if you could just give us a little more color on the casing failure you experienced in the Utica. You know, what do you think were the drivers of the issue? You know, maybe a little more on, you know, if you think this is something you could run into again in the future.

What do you think were the drivers of the issue and maybe a little more if.

If you think this is something you could run into again in the future.

You know, that's good questions, Zach. I mean, the good news is we went back and we, you know, studied all of our pumping pressures and everything. Everything else was well within range of what we've been doing for the last number of years.

No. That's a good question Zack I mean, the good news is we went back and we.

Tim Cutt: You know, that's a good question, Zach. I mean, the good news is we went back and, you know, studied all of our pumping pressures and everything. Everything else is well within range of what we've been doing for the last number of years. This ERW pipe is pipe that we've used for a number of years as well. You know, after we had the failure, we did an extensive logging suite on the wellbore. The pipe's in good shape. It's just failure in the seam itself. You know, we don't understand full root cause there. It can be manufacturing. We haven't determined that yet.

Studied all of our pumping pressures and everything and everything else as well within the range of what we've been doing for the last number of years.

This ERW pipe is a pipe that we've used for a number of years as well. You know, after we had the failure, we did an extensive logging suite on the well board. The pipe's in good shape. It's just failure in the seam itself.

W pipe as pipe that we've used for a number of years as well.

After we had the failure, we did an extensive logging suite on the on the Wellbore. The pipes are in good shape. It's just failure in the seam itself.

You know, we don't understand full root cause there, it can be.

We don't understand full recalls there it can be.

That can be manufacturing. We haven't determined that yet. So, you know, we just wanted to make sure that Adam and abundance caution for the well that we had already installed the same pipe. We didn't repeat and have a similar situation going forward. We are going to use seamless pipe and all the vertical sections of our well to avoid any chance of this, this reoccurring. So we think we've done the right thing as a prudent operator. You know, we've already run four and a half inch pipe inside of three Charlotte wells.

That can be manufactured and we haven't determined that yet. So we just wanted to make sure that out of an abundance of caution for the wells that we had already installed the same pipe, we didn't repeat and have a similar situation.

Tim Cutt: You know, we just wanted to make sure that out of an abundance of caution for the wells that we had already installed the same pipe, we didn't repeat and have a similar situation. Going forward, we are gonna use seamless pipe in all the vertical sections of our well to avoid any chance of this recurring. We think we've done the right thing as a prudent operator. You know, we've already run a 4.5-inch pipe inside of three Charlotte wells. We're in the process of drilling those wells out now. Those wells have been completed, and we were right at the end of that program, right towards the end of that program when we had the issue. Then on the Clark wells, we had already installed the 5.5-inch pipe. That also was ERW pipe.

Going forward, we are going to use seamless pipe in all the vertical sections of our well.

To avoid any chance of this this reoccurring so we.

We think we've done the right thing as prudent operator, we've already run a four and a half inch pipe and size of the three Charlotte wells.

We're in the process of drilling those wells out now. Those wells have been completed, and we're right at the end of that program, right towards the end of that program. We've had the issue. And then on the Clark wells, we had already installed the 5 1?2-inch pipe. That also was ERW pipe. We've decided out of an abundance of caution to go ahead and run those liners inside of that pipe as well.

We are in the process of drilling those wells out now those wells have been completed.

And we're right at the end of the program right towards the end of that program we've had the issue.

And then on Clark Wells, we had already installed a five five inch pipe.

Also it was the <unk> pipe, we've decided it out of an abundance of caution to go ahead and run those liners inside of that pipe as well.

Tim Cutt: We've decided out of an abundance of caution to go ahead and run those liners inside of that pipe as well. Once we have the frack crew available, we'll go ahead and frack those wells. It's just basically a timing issue for us. It costs a bit of money. Part of the dollars we're spending are associated with procuring the seamless pipe, but we think we've got a good plan going forward.

And once we have the frack crew available, we'll go ahead and frack those welds. But basically, it's a timing issue for us. It costs a bit of money. Part of the dollars we're spending are associated with procuring the seamless pipe. But we think we've got a good plan going.

Once we have the Frac crew available. We'll go ahead and Frac those wells, but it's just basically as a timing issue for us it cost a bit of money as part of the the dollars we're spending.

Our associated with procuring the seamless pipe.

But we think we've got a good plan going forward.

Got it. Then maybe shifting over to cash return, you know, been relatively aggressive with the buyback thus far and obviously raised the buyback authorization. Can you talk a little bit about the pace of the buyback going forward and how aggressive you plan to be? And, you know, at the current pace you're going, you'll clearly finish that by, you know, within 2022. Is that the plan?

Got it and then maybe shifting over to the cash return.

Zach Parham: Got it. Then maybe shifting over to cash return. You know, been relatively aggressive with the buyback thus far and obviously raised the buyback authorization. Can you talk a little bit about the pace of the buyback going forward and how aggressive you plan to be? You know, at the current pace you're going, you'll clearly finish that by, you know, within 2022. Is that the plan?

<unk> been relatively aggressive with the buyback thus far.

And obviously the buyback authorization can you talk a little bit about the pace of the buyback going forward, how how aggressive do you plan to be in.

At the current pace you go on you'll you'll clearly finished that by within 2022 is that the plan.

Yeah, I mean, as you know, with buybacks, Zach, we're always going to look at what's the best thing for the shareholder. Right now, we believe our share price is still significantly undervalued, and it's a fairly easy discussion about carrying that on, and that's why the board decided to do the next hundred.

Yeah, I mean, as you know with buybacks Zach we're always going to look at what's the best thing for the shareholder right. Now we believe our share price is still significantly undervalued and it's a fairly easy discussed discussion about carrying that on and Thats why the board decided to do the next hundred we'll look at that again as we work through the next the next phase once we finished out the first 100.

Tim Cutt: Yeah. I mean, as you know, with buybacks, Zach, we're always gonna look at what's the best thing for the shareholder. Right now, we believe our share price is still significantly undervalued, and it's a fairly easy, you know, discussion about carrying that on, and that's why the board decided to do the next hundred. We'll look at that again as we work through the next phase once we finish out the first hundred, moving to the second hundred. We're gonna just look at, like Bill said, we've got all the tools available to us. We could move to a common dividend. You know, we're always looking at the preferreds.

We'll look at that again as we work through the next phase, once we finish out the first hundred, moving to the second hundred. And we're going to just look at it, like Bill said, we've got all the tools available to us. We could move to a common dividend. We're always looking at the preferreds.

Moving to the second honored and we're going to just look at it like Bill said, we've got all the tools available to US we could move to a common dividend, we're always looking at the preferreds.

Tim Cutt: We're gonna just look at, like Bill said, we've got all the tools available to us. We could move to a common dividend. You know, we're always looking at the preferreds. It would be hard for me to say what kind of pace we're gonna be on for the buybacks because it really depends on where our share price is at the time.

Tim Cutt: It would be hard for me to say what kind of pace we're gonna be on for the buybacks because it really depends on where our share price is at the time.

And so it would be hard for me to say what kind of pace we're going to be on for the buybacks because it really depends on where our share price is at that point.

So it'll be hard for me to say, what kind of pace, we're going to be honest with buybacks because it really depends on where our share prices at the time.

Got it. Thanks, guys. And maybe I'll just sneak one more in the initial scoop. Well, well, it's on the Nelda pad or outperforming just any thoughts on on what the drivers are. I know you talked about, you know, running bigger fracks and wider spacing there, but just maybe any additional color you have.

Got it thanks, guys, maybe I'll just sneak one more in.

Zach Parham: Got it. Thanks, guys. Maybe I'll just sneak one more in. The initial Scoop wells on the Nelda pad are outperforming. Just any thoughts on what the drivers are? I know you talked about, you know, running bigger fracs and wider spacing there, but just maybe any additional color you have?

The initial scoop oil wells on the <unk> pad are outperforming just any thoughts on what the drivers are I know you talked about.

Bigger fracs and wider spacing there, but just maybe any additional color you have.

No I think thats the.

No, I think that's it. You know, the wells we drilled last year were called our on azimuth, it's the orientation of the wells. We thought those would be the best wells in the scoop. So we completed these wells thinking maybe we'd have a little bit lower performance on those. We're actually outperforming the on azimuth wells. It is, I think it really is, getting the spacing right and getting the size of the job right. A little bit on how we flow the wells back, but these are the first wells we've seen.

Tim Cutt: No, I think that's it. You know, the wells we drilled last year were called our on azimuth. It's the orientation of the wells. We thought those would be the best wells in the Scoop. We completed these wells thinking maybe we'd have a little bit lower performance on those. We're actually outperforming the on azimuth wells. It is, I think it really is getting the spacing right and getting the size of the job right, a little bit on how we flow the wells back, but these are the first wells we've seen, you know, sustain production. You know, you typically, in the Scoop, you hit peak production, you start declining, whereas in the Utica, you sustain production for a period of time.

The wells.

We drilled last year.

We're color on asbestos the orientation of the wells, we thought those would be the best wells in the scoop.

So we completed these wells thinking maybe we'd have a little bit lower performance on those we're actually outperforming the <unk> wells.

It is I think it really is getting the spacing right and getting the size of the job right.

A little bit on how we flow the wells back but these are the first wells we've seen.

you know, sustain production, you know, you typically in the scoop, you hit peak production, you start declining.

Sustain production.

Typically in the Scoop you hit peak production you start declining whereas in the Utica you sustained production for a period of time as you see in our chart in the deck, we could see sustained production for three or four months here. So obviously as we bring the SCR and O'neil wells on we'll be looking for hopefully similar performance.

Whereas in the Utica, you sustain production for a period of time, as you see in our chart in the deck.

Tim Cutt: As you see in our chart in the deck, you know, we could see sustained production for, you know, 3, 4 months here. Obviously, as we bring the SCR and O'Neill wells on, we'll be looking for hopefully similar performance. You know, we haven't planned on that type of performance yet, but, you know, super pleased with, you know, our subsurface team really dialing in and dialing in each of our frac jobs to what that part of the reservoir in the Utica and the Scoop is telling us.

You know, we could see sustained production for, you know, three, four months here. So, obviously, as we bring the SCR and O'Neill wells on, we'll be looking for.

Hopefully similar performance. We haven't planned on that type of performance yet, but super pleased with our surf-surface team really dialing in.

We havent planned on that type of performance, yet, but you'll.

Super pleased with our subsurface seem really dialing in and dialing in each of our frac jobs to what that part of the reservoir in the Utica and the Scoop is telling us.

and dialing in each of our FRAC jobs to what that part of the reservoir in the Edica and the SCOOP is telling us.

Thanks, guys that's it for me.

Zach Parham: Thanks, guys. That's it for me.

Tim Cutt: All right. Thank you.

Alright, thank you.

Thank you. Thank you. The next question is coming from Stephen Deckert from Key Banker Line is now live.

Operator: Thank you. Next question is coming from Steven Decker from KeyBanc. Your line is now live.

Operator: Thank you. Next question is coming from Tim Rezvan from KeyBanc. Your line is now live.

Your next question is coming from Stephen Dechert from Keybanc. Your line is now live.

Hey, guys just wondering get some more color on why.

Hey guys, I just want to get some more color on why the well completion is in the Utica were delayed. Thank you.

Steven Decker: Hey, guys, just wanna get some more color on why well completions in the Utica were delayed. Thank you.

Tim Rezvan: Hey, guys, just wanna get some more color on why well completions in the Utica were delayed. Thank you.

Well completions in the Utica or delayed thank you.

Yes, it's associated with.

Tim Cutt: Yeah. It's associated with the issue that I answered the question on a little bit earlier on the issue we have on the Charlotte pad. Our plan was originally to frack the Charlotte, bring those online, move that same frack unit over to the Clarks. We had to take a bit of a timeout to run the liners on 6 wells. We let that frack crew go, and we're in the process of procuring a frack crew back. That's it. That's the timing difference. We've put that in the updated charts. Hopefully we'll have that crew procured soon, and we get back to business on that. That's the issue, and that's why it doesn't change anything about our run rate exiting the year.

Yeah, it's associated with the the issue that I asked the question on a little bit earlier on the issue. We have on the Charlotte pad So we basically our plan was originally to practice Charlotte bring those online move that same fracking it over to the Clarks

The issue that I asked.

The question on a little bit earlier on the issue we have in the Charlotte pad.

Basically our plan was originally to Frac the Charlotte bring those online move that St. <unk> unit over to Clark's we had to take a bit of a time out to run the liners on six wells.

We had to take a bit of a time out to run the liners on six wells. We let that frack crew go, and we're in the process of procuring a frack crew back. So that's it. So that's the timing difference. We've put that in the updated charts.

Let that Frac crew and we're in the process of procurement procuring a frac crew back. So that's it. So that's that's the timing difference we've put that in the updated charts.

Uh, hopefully we'll, we'll have that, uh, crew procured soon and we get back to business on that. But that's the, that's the issue. And that's why it doesn't change anything about our run rate exiting the year.

We will have that.

Crew procured soon and we get back to business on that but that's the that's the issue and that's why it doesn't change anything about our run rate exiting the year and we're still feeling really good about especially with the performance we're seeing on our 2023 potential performance.

And we're still feeling really good about it, especially with the performance we're seeing on our 2023 potential performance.

Tim Cutt: We're still feeling really good about, especially with the performance we're seeing on our 2023 potential performance.

Okay. Thanks, that's it for me.

Steven Decker: Okay, thanks. That's it for me.

Tim Rezvan: Okay, thanks. That's it for me.

Thank you we reached end of our question and answer session I would like to turn the floor back over to Tim for any further closing comments.

Operator: Thank you. We've reached the end of our question and answer session. I'd like to turn the floor back over to Tim for any further closing comments.

Thank you. We reached the end of our question and answer session. I'd like to turn the floor back over to Tim for any further closing comments.

All right, thank you very much. Thanks for your interest and joining the call. As always, if you have any questions, please reach out to our Investor Relations team. And that concludes our call. Thank you.

Alright. Thank you very much thanks for your interest in joining the call.

Tim Cutt: All right. Thank you very much. Thanks for your interest in joining the call. As always, if you have any questions, please reach out to our investor relations team. That concludes our call. Thank you.

As always if you have any questions. Please reach out to our Investor relations team and that concludes our call. Thank you.

Thank you that does conclude today's teleconference and webcast you may disconnect your lines and have a great day. Thank you for your participation today.

Operator: Thank you. That does conclude today's teleconference and webcast. You may disconnect your line and have a great day. We thank you for your participation today.

Thank you. That does conclude today's teleconference and webcast. You may disconnect your line and have a great day. We thank you for your participation.

Q1 2022 Gulfport Energy Corp Earnings Call

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