HighPoint Resources Corporation (NYSE:HPR) Q3 2019 Earnings Conference Call Transcript

Nov 05, 2019 • 10:00 am ET

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HighPoint Resources Corporation (NYSE:HPR) Q3 2019 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Q3 2019 HighPoint Resources Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] I would now like to hand the call over to Larry Busnardo. Please go ahead, sir.

Executive
Larry C. Busnardo

Good morning, and thank you for joining us today for the HighPoint Resources third quarter 2019 earnings call. With me today are Scot Woodall, Chief Executive Officer; Paul Geiger, Chief Operating Officer; and Bill Crawford, Chief Financial Officer.

Before we begin, please review the disclosure statements provided within the forward-looking statements of our earnings release which you can find on our website at hpres.com. You can also find and review these disclosures as they are referenced in our other filings with the SEC or in our 10-Q, which we filed yesterday afternoon.

In addition, we'll be referencing non-GAAP financial measures during our call and a reconciliation to GAAP financial statements can be found at the end of our press release. We've also posted an updated corporate presentation to the Investor Relations portion of our website that we will be referencing on today's call.

With that I'll turn the call over to Scot for prepared comments.

Executive
R. Scot Woodall

Good morning, and thank you for joining us today to discuss our very positive third quarter financial and operational results, which reflects our strong operational execution and has us on track to meet our full-year guidance. I will provide some overview comments before handing the call over to Bill and Paul for the financial and operational update.

As we've discussed previously, our primary objective for the first half of the year was to execute and complete our optimization program in the Hereford Field to demonstrate the quality and economic value of the asset. We have delivered on this goal as recent Hereford well results have shown a substantial and continuous improvement in well productivity and performance compared to early program wells. Today, we provide further Hereford results that show continued improved well performance and builds upon the positive update we provided in early October. We continue to assess further performance opportunities of upspacing and increased completion intensity. This strong performance allowed us to achieve a Company record of Hereford production averaged over 10,000 BOE per day during the third quarter, which is a robust increase of 41% over the second quarter.

Specifically, the continued production performance of the Section 16 East wells, coupled with continued reduction in well cost, provide a strong future outlook for the economic development of the vast Hereford acreage position. For the third quarter, we achieved production that was at the high end of the guidance range and oil volumes exceeded the high end of guidance. When combined with a meaningful improvement in cash cost, we generated EBITDAX of $94 million which was 30% greater than the second quarter and 7% higher than consensus estimates.

We achieved another primary objective by becoming cash flow positive during the quarter. This will continue in the fourth