HighPoint Resources Corporation (NYSE:HPR) Q4 2019 Earnings Conference Call - Final Transcript
Feb 27, 2020 • 09:00 am ET
Ladies and gentlemen, thank you for standing by and welcome to the HighPoint Resources' Fourth Quarter 2019 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions]
I'd now like to hand the conference to your speaker today, Larry Busnardo, Vice President of Investor Relations. Please go ahead, sir.
Larry C. Busnardo
Good morning, and thank you for joining this morning for the HighPoint Resources fourth quarter and year-end 2019 earnings call.
On the call with me today are Scot Woodall, CEO; Paul Geiger, COO; and Bill Crawford, CFO.
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 these within our other filings with the SEC or in our 10-K, which we filed yesterday afternoon.
We'll also 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.
In addition, we've posted an updated corporate presentation to the Investor Relations portion of our website, again we will be referencing several slides within the corporate presentation on today's call.
With that, I'll turn it over to Scot to begin the prepared comments.
R. Scot Woodall
Good morning and thank you for joining us today to discuss our fourth quarter and year-end 2019 financial and operational results. We will also be discussing our 2020 plans. 2019 was not without challenges but we executed financially and operationally as an organization in our first full year operating as HighPoint Resources. Our returns focused strategy allowed us to execute our corporate initiatives and deliver solid financial and operational performance. Our top priorities for 2019 was to sustain the capital program that would generate free cash flow in the second half of the year. This was accomplished during the third quarter. The excess cash was used to strengthen our balance sheet and reduce borrowings under our credit facility.
Our solid operational execution and ability to optimize our cost structure was evident in our financial results as we meaningfully increased EBITDAX by 21% to $339 million. This was underpinned by development activities that drove production sales volumes growth of 23% to 12.5 million barrels and oil volume growth of 21% to 7.7 million barrels. This was accomplished with capital expenditures that were 29% lower in 2018 underscoring our commitment to maintaining a disciplined approach to capital investment.
We maintained a focus on managing cost by reducing operating costs by 16% per Boe compared to 2018 and that includes a 23% reduction in cash G&A. Our profitability was also demonstrated by our peer-leading operating margin of $30.31 per barrel that benefits from our assets having high oil percentage, a oil price differential and low operating cost structure.
Operationally, our efforts were highlighted by the successful execution of our large-scale of optimization program in the Hereford field, which is realized intangible benefits of increased capital efficiency, enhanced well performance and stronger per well economics. This