Chaparral Energy (NYSE:CHAP) Q1 2020 Earnings Conference Call - Final Transcript

May 12, 2020 • 10:00 am ET

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Chaparral Energy (NYSE:CHAP) Q1 2020 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Ladies and gentlemen, thank you for standing by, and welcome to Chaparral Energy's First Quarter 2020 Financial and Operational Results Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] I'd now like to hand the conference over to your first speaker today, Patrick Graham, Senior Director of Corporate Finance. Thank you. Please go ahead, sir.

Executive
Patrick Graham

Thank you, operator. Good morning, everyone, and welcome to Chaparral Energy's first quarter 2020 conference call. Before I turn the call over to our Chief Executive Officer, Chuck Duginski, I'd like to encourage you to download our 10-Q and corresponding earnings release as well as our updated Company presentation, which are currently available in the Investors section of our website. You can also sign up to automatically receive updates about Chaparral through e-mail alerts feed on our Investors page.

Please be aware that during the call, we will discuss certain topics that contain forward-looking statements based on our beliefs, assumptions and information currently available to our management team. Although, we believe expectations reflected in such forward-looking statements are reasonable, we can give no assurance that they will prove to be correct. There are numerous factors which could cause actual results to differ materially from what is discussed. You can read our full disclosure on forward-looking statements and the risk factors associated with our business in our most recent 10-Q. In addition, we will also present certain non-GAAP measures, reconciliations to which can be found in our 10-Q.

With that said, I will now turn the call over to Chuck.

Executive
Charles Duginski

Thank you, Patrick. Good morning, everyone, and thank you for joining us today. Before I go into our first quarter 2020 results, I'd like to discuss the unprecedented environment the entire energy industry is facing and how Chaparral is responding to these challenges.

The global COVID-19 pandemic coupled with worldwide supply and demand imbalances have created significant uncertainty in oil prices and further tighten the capital markets. We have a long history of commitment to the health and safety of our employees and contractors. As such, in early March, we provided all employees in our corporate office with the equipment and software needed to work-from-home and shortly after, remote work became the policy for corporate employees.

Field employees have been provided additional personal protective equipment to protect themselves and others, and all in-person field meetings have been suspended. We have adhered to the advice and directives of federal, state and local governments as well as health leaders.

Operationally and financially, we've taken decisive action to minimize our capital spend, maximize our annual cash flow and provide financial stability. Leveraging our operational flexibility, improved cost structure and strong 2020 oil hedge book, we are reducing our exposure to the current abnormally low wellhead prices to preserve value and maximize cash flow for the year.

We dropped our operated rigs, stopped all drilling and completion operations and are in the process of shutting in