EP Energy Corporation (NYSE:EPE) Q1 2019 Earnings Conference Call Transcript

May 09, 2019 • 10:00 am ET

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EP Energy Corporation (NYSE:EPE) Q1 2019 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good morning, and welcome to the EP Energy First Quarter 2019 Results Conference Call. All participants will be in listen-only mode. (Operator Instructions) Please note, today's event is being recorded.

I would now like to turn the conference over to Jordan Strauss, Manager of Investor Relations. Please go ahead, sir.

Executive
Jordan Strauss

Thank you, Rocco, and good morning, everyone. Thank you for joining us today for EP Energy's First Quarter 2019 Financial and Operational Results Conference Call. Joining me on the call this morning are EP Energy's President and Chief Executive Officer, Russell Parker; and Senior Vice President and Chief Financial Officer, Kyle McCuen. I hope you've had a chance to review the earnings release and the supplemental presentation that we published yesterday. The earnings release and presentation are available in the Investors section of our website at epenergy.com. Also like last quarter, we intend to communicate our key points on this call today, we'll not be hosting a Q&A session after our remarks.

I'd like to remind everyone that on today's call, we'll discuss forward-looking statements and certain non-GAAP financial measures. We encourage everyone to read our full disclosures on forward-looking statements and GAAP reconciliations, which can be found at the end of the company's earning release and in our documents on file with the SEC. These documents are also available on our website.

And with that, I'll now turn the call over to Mr. Russell Parker.

Executive
Russell E. Parker

Thanks, Jordan, and good morning, everyone, and thank you for your continued interest in EP Energy and for joining us on this call. I'm going to start by providing an update on the overall business and performance of our asset program and Kyle will then go over some of the details of our financial results and provide more information related to our second quarter outlook. Also, we're going to continue a similar approach to the last call and refer to certain slides in our presentation that we posted to our website yesterday to make sure that key points are understood. Looking at Slide 4 of our results for the first quarter, you can see we came in above the high end of guidance for production and below the low end of guidance for capital. Our drop in production quarter-over-quarter is a direct result of our reduced net completion count.

On Slide 11, we highlight our lower net completion count per month during the fourth and first quarters compared to prior periods. We plan to continue that trend into the second quarter. We have built a significant DUC inventory over the last couple of quarters, and we expect the second quarter to be the peak of our inventory build this year. Right now, we continue to evaluate the decision on adding another frac crew to accelerate the completion of that DUC inventory during the back half of 2019. We'll maintain our focus on capital efficiency, building off of the success and completion design improvement seen in 2018 as well as our expanding horizontal program in Northeastern