PDC Energy, Inc. (NASDAQ:PDCE) Q1 2018 Earnings Conference Call - Final Transcript

May 03, 2018 • 11:00 am ET

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PDC Energy, Inc. (NASDAQ:PDCE) Q1 2018 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good day, ladies and gentlemen, and welcome to the PDC Energy First Quarter 2018 Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. (Operator Instructions) As a reminder, today's conference is being recorded.

I would now like to introduce your host for today's conference call, Mr. Mike Edwards, Senior Director, Investor Relations. You may begin, sir.

Executive
Michael Edwards

Good morning, everyone, and welcome. On the call today, we have Bart Brookman, President and CEO; Lance Lauck, Executive Vice President; Scott Reasoner, Chief Operating Officer; and Scott Meyers, Chief Financial Officer. Yesterday afternoon we issued our press release and posted a slide presentation that accompanies our remarks today. We also filed our 10-Q. The press release and presentation are available on the Investor Relations page of our website which is pdce.com.

I'd like to call your attention to our forward-looking statements on Slide 2 of that presentation. We will present some non-US GAAP financial numbers today, so I'd also like to call your attention to the appendix slides of that presentation where you'll find a reconciliation of those non-US GAAP financial measures.

With that, we can get started and I'll turn the call over to Bart Brookman, our CEO.

Executive
Barton R. Brookman

Thank you, Mike, and hello, everyone. First quarter of 2018, a strong quarter with solid results slightly ahead of our expectations. And where we stand today, a couple of significant catalysts should accelerate our growth and financial strength as we progress through the second half of 2018 and into 2019. Let me quickly cover those. First, DCP's start-up of Plant 10 expected late this summer should significantly unbundle our Wattenberg production and is the first step in a series of major midstream expansions over the next couple of years that should provide long-term capacity for our production. Second, our ongoing Delaware results. Production is exceeding our expectations both basin-wide and individual well performance. These impressive results should gain even more momentum through the end of the year as we continue to streamline our drilling, completion, production, and midstream operations.

Some first quarter highlights. When compared to first quarter 2017, a 34% improvement in production to 8.9 million barrels of oil equivalent or 99,000 Boe per day. And very important, our oil production improved over 50% from the same quarter last year. This production exceeds our internal expectations. And given the challenging midstream situation in Wattenberg, we were very pleased our corporate production was 5% above fourth quarter 2017 levels. The oil mix for the Company remains strong at 43%, primarily due to the growth in the Delaware Basin. And in the Delaware, we turned in line seven wells, the majority of these in our Central area, and all wells are meeting or exceeding our early production expectations. Overall, we are extremely pleased with the Delaware team's execution as we gain traction in almost every phase of our operations.

Now let me hit some key financial metrics for the