Goodrich Petroleum Corp. (NYSE:GDP) Q2 2020 Earnings Conference Call - Final Transcript

Aug 11, 2020 • 11:00 am ET

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Goodrich Petroleum Corp. (NYSE:GDP) Q2 2020 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good day, and welcome to the Goodrich Petroleum Second Quarter 2020 Earnings Call.

[Operator Instructions]

I would now like to turn the conference over to Gil Goodrich, Chairman and CEO. Please go ahead.

Executive
Walter G. Goodrich

Thank you, Jason. Good morning, everyone. Thank you for joining us for our second quarter 2020 earnings call this morning.

With our core Haynesville Shale position and natural gas focused development strategy, we are very well positioned with improving market fundamentals, including reduced drilling and completion costs and increasing future prices for natural gas. In fact, with the current development cost and a calendar year strip for natural gas now at approximately $2.75, our forward-looking rates of return, payback periods and margins are as attractive as they have ever been.

While 2021 natural gas prices look quite good, current prop month remained depressed at around $2 per Mcf after basis differential. And therefore, we have slightly delayed the completion of three drilled but uncompleted wells to a little later in the third quarter than previously planned, which will impact 3Q production, but should allow us to produce more volumes into higher prices in the fourth quarter of this year.

With roughly flat production versus the first quarter of approximately 138 million cubic feet of natural gas and equivalents per day, we reported quarterly EBITDA of $15.4 million. In addition, we reduced our rate of development activities during the quarter with capital expenditures of approximately $10 million. We have again prepared a slide presentation, and we invite you to follow along with the slide deck during our prepared remarks. You can access the slide presentation on the Goodrich Petroleum website entitled 2Q 2020 Earnings Presentation.

I will now turn to the slide presentation. For those of you who would like to follow along and our standard disclaimer forward-looking statements and risk factors are highlighted for you on Slide 2.

On Slide 3, we again provide specific data regarding our environmental, social and governance statistics. We plan to continue to share this information with you as well as update and refine as conditions and best practices evolve over time.

On Slide 4, we have again included an overview of the Company, which highlights various aspects of our core Haynesville Shale position in Northwest Louisiana as well as recent performance and results. Of note, since the beginning of the year, we have added approximately 2,000 net acres in the core of the Haynesville through several small bolt-on transactions on a drill to earn basis, which increases our core position to approximately 24,000 net acres and meaningfully increases our core inventory.

As I mentioned, Company's total net production was up slightly versus the first quarter of this year to an average of 138 million cubic feet of gas and equivalents per day as we try to maintain roughly flat production quarter-over-quarter. We expect quarterly production may fluctuate based on the timing and completion cadence as we add wells, which typically have a high working interest and very robust early time production levels.