Energen Corp. (NYSE:EGN) Q1 2018 Earnings Conference Call Transcript

May 08, 2018 • 08:30 am ET

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Energen Corp. (NYSE:EGN) Q1 2018 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Greetings and welcome to the Energen First Quarter Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. (Operator Instructions) As a reminder, this conference is being recorded.

It is now my pleasure to turn the conference over to your host, Julie Ryland, Vice President of Investor Relations. Thank you. You may begin.

Executive
Julie S. Ryland

Thank you, Diego, and good morning. Today's conference call is being held in conjunction with Energen Corporation's announcement this morning of its operating and financial results for the three months ended March 31st, 2018. The slide deck to be used in today's call can be found on Energen's homepage at www.energen.com.

Today's conference call will include comments expressing expectations of future plans, objectives and performance. Such comments constitute forward-looking statements made pursuant to the Safe Harbor provision of the Private Securities Litigation Reform Act of 1995. All statements based on future expectations are forward-looking statements that are dependent on certain events, risks and uncertainties that may be outside the Company's control and could cause actual results to differ materially from those anticipated.

Please refer to our periodic reports filed with the SEC for a more complete discussion of the risks and uncertainties that could affect Energen's future results.

At this time, I'll turn the call over to Energen Chairman and CEO, James McManus. James?

Executive
James T. McManus

Thank you, Julie. Energen is off to an excellent start in the first quarter of '18. Our total production was 92.9 MBOE per day, which surpassed our guidance by 4%, primarily due to well out-performance. Oil production was 55.4 MBOE per day, exceeding the top end of our guidance midpoint by 5%.

Also, per unit net SG&A expense was $2.66 per barrel, which beat the guidance midpoint by 11%. And adjusted EBITDAX totaled $240.6 million, exceeding internal expectations by 10%. We'd also point out that the Company is 70% hedged for the remainder of the year and importantly, 58% of the mid-cush differential for the remainder of '18 is hedged at $1.29. We also completed some accretive bolt-on acquisitions in the first quarter, 1,100 net leased acres for $18 million, again, primarily extending lateral lengths.

We also brought several wells on during the quarter, continuing to showcase strong execution. We had 23 net wells turn to production in the first quarter of '18 as efficiencies helped drive above-budget pace, although many of those wells had no impact on production in the quarter. They were just turned on a little earlier in the first quarter as opposed to early in the second -- I mean, late in the first quarter as opposed to early in the second quarter.

Importantly, we had eight new Gen 3 Wolfcamp wells with just outstanding results, IP rates in excess of 440 BOE per day per 1,000 foot. Truly outstanding wells continue to be the case in the Delaware. And our performance on new Gen 3 Wolfcamp wells in the Central Midland Basin were basically in line with the type