PDC Energy, Inc. (NASDAQ:PDCE) Q1 2019 Earnings Conference Call - Final Transcript

May 02, 2019 • 11:00 am ET

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PDC Energy, Inc. (NASDAQ:PDCE) Q1 2019 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 2019 Conference Call. At this time, all participants are in a listen-only mode. (Operator Instructions) As a reminder, this conference is being recorded.

I'd now like to turn the call over to Michael Edwards, Senior Director, Investor Relations. You may begin.

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 the 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, 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 will find a reconciliation of those non-US GAAP financial measures. In regards to proxy matters as well as to access materials, please go to the website votewhiteforPDC.com..

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

Executive
Barton Brookman

Thank you, Mike. Good morning, everyone. First quarter 2019, a strong quarter for the Company and on target with our expectations. Today, the team will give details on the quarter and outline significant steps in our ever improving outlook. These include enhanced capital efficiency in both basins; the Company's operational excellence, we brought on a series of tremendous wells in the first quarter; cost improvements; free cash flow outlook; and our financial strength. I hope you leave today's call with a clear understanding of the tremendous opportunities the Company has for ongoing success for many years to come.

Let me start with some quarterly highlights. When compared to the first quarter of 2018, a 26% improvement in production for the Company, to a 11.2 million barrels of oil equivalent or 125,000 Boe per day. Wattenberg production improved 30% when compared to the first quarter of 2018. This is primarily due to the strong work of our operating team over the last 12 months, along with the ongoing improved line pressures related to DCP's Plant 10 startup, which occurred last August. In Delaware, production improved 20% year-over-year and our drilling and completion efficiencies continue to make tremendous progress, with improvements in our drill times and completion designs. Also in the Delaware, our oil marketing arrangement continues to shine, leading to strong net-backs for the quarter of 97% of WTI.

From a financial perspective, adjusted EBITDAX, $209 million, LOE $3.14 per Boe, G&A improved dramatically from 2018 levels, to $3.53 per Boe. Capital spend for the quarter, $282 million. This is slightly ahead of our plan due to ongoing improvements in our drill times and completion efficiencies in both basins, but we are on target for our $840 million spend for the full year.