Brigham Minerals Inc (NYSE:MNRL) Q2 2020 Earnings Conference Call - Final Transcript
Aug 13, 2020 • 10:00 am ET
Good morning, and welcome to Brigham Minerals Second Quarter 2020 Earnings Conference Call. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions]
I'd now like to turn the conference over to Mr. Chris Catton [Phonetic], Investor Relations. Please go ahead.
Thank you, operator and good morning, everyone. Welcome to the Brigham Minerals second quarter 2020 earnings conference call. Joining us today are Bud Brigham, Founder and Executive Chairman; Rob Roosa, Founder and Chief Executive Officer; and Blake Williams, our Chief Financial Officer.
Before we begin, I would like to remind you that our remarks, including the answers to your questions, contain forward-looking statements, and we refer you to our earnings release for a detailed discussion of these forward-looking statements and the associated risks. In addition, during this call, we make references to certain non-GAAP financial measures. Reconciliations to applicable GAAP measures can also be found in our earnings release.
A couple of administrative items. We have a new investor presentation titled Second Quarter 2020 Investor Presentation available for download on our website brighamminerals.com. We recommend downloading the presentation in the event we refer to it during the conference call. Lastly, as a reminder, today's call is being webcast and is accessible through the audio link on our IR website.
I would now like to turn the call over to Bud Brigham, Founder and Executive Chairman.
Thank you, Chris. We appreciate everyone joining us this morning on our second quarter 2020 earnings conference call. The second quarter was extremely challenging for the oil and gas industry. I've experienced numerous cycles over the years, but this one is certainly unique. During the second quarter, prices reached record lows, and as a result, activity was significantly impacted. In particular, across the different basins and a liquid rich resource plays that we monitor, we saw 70% to 90% of the rigs laid down and 90% of the frac crews idled, a drop from approximately 190 frac crews in February to less than 20 by early May.
Free markets were responsive to the pricing signals with operators rapidly and responsibly reducing their activities and curtailing production. And as a result, the industry is recovering faster than most expected. However, this has been an extreme cycle and as such, we expect financially challenged operators to liquidate or consolidate with larger entities and those surviving operators will focus on drilling our highest remaining rate of return wells. A great example of this expected consolidation is Chevron's recently announced acquisition of Noble Energy.
Subsequent to the acquisition, Chevron will operate 8% of Brigham Minerals undeveloped inventory, and we are thrilled to see our assets migrate into the hands of a larger, stronger company whose balance sheet will enable more consistent resource development. This is the Darwinism of the oilfield that we've experienced time and again over the years. The core leasehold that Brigham Minerals owns minerals under continually migrates to the top tier operators with the strongest balance sheets. Chevron's performance during the