HOUSTON, May 7, 2024 /PRNewswire/ — Chord Energy Corporation (NASDAQ: CHRD) (“Chord”, “Chord Energy” or the “Company”) today reported financial and operating results for the first quarter 2024.
1Q24 Operational and Financial Highlights:
- Oil volumes of 99.0 MBopd exceeded the high-end of guidance;
- Lease Operating Expense of $10.39/BOE was below the low-end of guidance;
- Total volumes of 168.4 MBoepd;
- E&P and other CapEx of $257.7MM (including $3.9MM of reimbursed non-operated capital);
- 1Q24 volumes and capital reflect activity acceleration driven by cycle-time improvement, along with strong well performance;
- Net cash provided by operating activities was $406.7MM and net income was $199.4MM;
- Adjusted EBITDA(1) was $464.8MM and Adjusted Free Cash Flow(1) was $199.6MM; and
- Chord and Enerplus Corporation (“Enerplus”) expect to complete the previously announced transaction to combine on May 31, 2024, subject to customary closing conditions. See “Update on Enerplus Combination” below for additional information.
1Q24 Shareholder Return Highlights:
- Return of capital was set at $153MM, or 75% of Adjusted Free Cash Flow (excluding $3.9MM of reimbursed non-operated capital);
- Share repurchases totaled $30.0MM (weighted average price of $155.20 per share);
- Declared a base-plus-variable cash dividend of $2.94 per share of common stock. See “Return of Capital” below for additional information.
| (1) Non-GAAP financial measure. See “Non-GAAP Financial Measures” below for a reconciliation to the most directly comparable financial measures under United States generally accepted accounting principles (“GAAP”). |
“Chord delivered exceptional operational performance in the first quarter,” said Danny Brown, Chord Energy’s President and Chief Executive Officer. “The team rebounded quickly from difficult weather conditions in January while improving cycle times in our development program and exhibiting the strongest quarterly safety performance in company history. This improved operational performance, coupled with strong well performance, drove first quarter oil production and free cash flow above expectations. Shareholder returns remain robust, supported by deep, low-cost inventory and excellent capital efficiency.”
Mr. Brown continued, “Chord and Enerplus remain on track to combine at the end of the month, creating a premier Williston Basin operator with enhanced scale, significant low-cost inventory, financial strength, and peer-leading shareholder returns. Chord has completed numerous transactions since 2021, and our organization has made integration a core competency. The Chord and Enerplus teams are working diligently to identify incremental synergies and expect to see more than $150MM of synergies captured, excluding upside from stock-based compensation or cost of capital. We remain focused on our core operating philosophy emphasizing capital discipline, improving operational efficiency and returns, and sustainable practices. We remain excited about the oil and gas industry and the value we bring to the world.”
Update on Enerplus Combination:
Chord and Enerplus continue to make progress on their pending combination in a stock-and-cash transaction and expect the transaction to close on May 31, 2024, subject to customary closing conditions. The waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 expired on April 5, 2024, which satisfied one of the conditions to closing.
On April 9, 2024, Chord filed its definitive proxy statement relating to the special meeting of Chord stockholders to consider and vote upon (i) the issuance of shares of Chord common stock in connection with the transaction and (ii) the amendment to its charter to increase the number of authorized shares of Chord common stock from 120,000,000 to 240,000,000. The record date for the Chord stockholders entitled to vote at its special meeting was the close of business on April 8, 2024, and the special meeting is scheduled to be held on May 14, 2024.
On April 25, 2024, Enerplus filed its management information circular relating to the special meeting of Enerplus shareholders to consider and vote upon the transaction. The record date for the Enerplus shareholders entitled to vote at its special meeting was the close of business on April 22, 2024, and the special meeting is scheduled to be held on May 24, 2024.
1Q24 Operational and Financial Update:
The following table presents select Chord standalone 1Q24 operational and financial data compared to guidance released in February 2024:
| Metric | 1Q24 Actual | 1Q24 Guidance | ||
| Oil volumes (MBopd) | 99.0 | 95.0 – 98.0 | ||
| NGL volumes (MBblpd) | 34.4 | 33.0 – 34.0 | ||
| Natural gas volumes (MMcfpd) | 209.8 | 217.0 – 223.0 | ||
| Total volumes (MBoepd) | 168.4 | 164.2 – 169.2 | ||
| Oil discount to WTI ($/Bbl) | $(1.71) | $(2.30) – $(1.30) | ||
| NGL realization (% of WTI) | 20 % | 15% – 25% | ||
| Residue gas realization (% of Henry Hub) | 51 % | 55% – 65% | ||
| LOE ($/Boe) | $10.39 | $10.70 – $11.50 | ||
| Cash GPT ($/Boe)(1) | $3.30 | $2.80 – $3.40 | ||
| Cash G&A ($MM)(1) | $14.5 | $16.5 – $19.5 | ||
| Production Taxes (% of oil, NGL and gas sales) | 8.5 % | 8.4% – 8.8% | ||
| E&P & Other CapEx ($MM)(2) | $257.7 | $230 – $260 | ||
| Cash Interest ($MM)(1) | $7.4 | $7.0 – $8.0 | ||
| Cash Tax (% of Adjusted EBITDA)(3) | 0 % | 0% – 5% |
| ___________________ | |
| (1) | Non-GAAP financial measure. See “Non-GAAP Financial Measures” below for a reconciliation to the most directly comparable financial measures under GAAP. |
| (2) | Includes $3.9MM of reimbursed non-operated capital. |
| (3) | Based on $70/Bbl – $90/Bbl WTI. |
Chord had 29 gross (23.4 net) operated turn-in-line (“TIL”) wells in 1Q24 (52% three-mile laterals).
During the three months ended March 31, 2024, net cash provided by operating activities was $406.7MM and net income was $199.4MM ($4.65/diluted share). Adjusted EBITDA was $464.8MM, Adjusted Free Cash Flow was $199.6MM and Adjusted Net Income was $218.1MM ($5.10/diluted share). Adjusted EBITDA, Adjusted Free Cash Flow and Adjusted Net Income are non-GAAP financial measures. See “Non-GAAP Financial Measures” below for a reconciliation to the most directly comparable financial measures under GAAP.
Updated Outlook:
Chord’s guidance outlook does not include impacts from the pending combination with Enerplus. Chord expects to update its 2024 guidance following the completion of the transaction.
Chord’s FY24 guidance remains largely unchanged relative to the outlook released in February, while 2Q24 guidance reflects the impacts of acceleration driven by cycle-time improvement. FY24 guidance was updated to reflect lower natural gas volumes and price realizations were adjusted to reflect current market conditions. On a standalone basis in 2024, Chord continues to expect to TIL 103 – 113 gross operated wells (approximately two-thirds three-mile laterals). Additionally, Chord expects to generate approximately $1.9B of Adjusted EBITDA and $870MM of Adjusted Free Cash Flow with a reinvestment rate of approximately 50% ($80/Bbl WTI and $2.50/MMBtu Henry Hub). Chord remains focused on generating strong returns and sustainable free cash flow for shareholders.
The following table presents select Chord standalone operational and financial guidance for 2Q24 and FY24:
| Metric | 2Q24 Guidance | Updated FY24 Guidance |
Original FY24 Guidance |
|||
| Oil volumes (MBopd) | 97.5 – 100.5 | 97.0 – 101.0 | 97.0 – 101.0 | |||
| NGL volumes (MBblpd) | 34.0 – 35.0 | 34.0 – 35.0 | 34.0 – 35.0 | |||
| Natural gas volumes (MMcfpd) | 219.0 – 225.0 | 214.0 – 220.0 | 217.5 – 223.5 | |||
| Total volumes (MBoepd) | 168.0 – 173.0 | 166.7 – 172.7 | 167.3 – 173.3 | |||
| Oil premium (discount) to WTI ($/Bbl) | $(1.80) – $0.20 | $(1.75) – $0.00 | $(1.75) – $0.00 | |||
| NGL realization (% of WTI) | 15% – 25% | 15% – 25% | 15% – 25% | |||
| Residue gas realization (% of Henry Hub) | 35% – 45% | 40% – 50% | 45% – 55% | |||
| LOE ($/Boe) | $10.70 – $11.50 | $10.50 – $11.30 | $10.60 – $11.40 | |||
| Cash GPT ($/Boe)(1) | $2.60 – $3.20 | $2.40 – $3.00 | $2.30 – $2.90 | |||
| Cash G&A ($MM)(1) | $16.5 – $19.5 | $63.0 – $73.0 | $63.0 – $73.0 | |||
| Production Taxes (% of oil, NGL and gas sales) | 8.4% – 8.8% | 8.4% – 8.7% | 8.4% – 8.8% | |||
| E&P & Other CapEx ($MM) | $275 – $295 | $905 – $945 | $905 – $945 | |||
| Cash Interest ($MM)(1) | $7.0 – $8.0 | $28.0 – $32.0 | $28.0 – $32.0 | |||
| Cash Tax (% of Adjusted EBITDA)(2) | 0% – 7% | 4% – 9% | 3% – 9% |
| ___________________ | |
| (1) | Non-GAAP financial measure. See “Non-GAAP Financial Measures” below for a reconciliation to the most directly comparable financial measures under GAAP. |
| (2) | Based on $70/Bbl – $90/Bbl WTI. |
Select Operational and Financial Data:
The following table presents select operational and financial data for the periods presented:
| 1Q24 | 1Q23 | ||
| Production data: | |||
| Crude oil (MBopd) | 99.0 | 95.1 | |
| NGLs (MBblpd) | 34.4 | 32.7 | |
| Natural gas (MMcfpd) | 209.8 | 221.4 | |
| Total production (MBoepd) | 168.4 | 164.7 | |
| Percent crude oil | 58.8 % | 57.7 % | |
| Average sales prices: | |||
| Crude oil, without realized derivatives ($/Bbl) | $ 75.32 | $ 76.04 | |
| Differential to NYMEX WTI ($/Bbl) | (1.71) | — | |
| Crude oil, with realized derivatives ($/Bbl) | 75.17 | 65.79 | |
| Crude oil realized derivatives ($MM) | (1.4) | (87.7) | |
| NGL, without realized derivatives ($/Bbl) | 15.09 | 21.13 | |
| NGL, with realized derivatives ($/Bbl) | 15.09 | 22.10 | |
| NGL realized derivatives ($MM) | — | 2.9 | |
| Natural gas, without realized derivatives ($/Mcf) | 1.16 | 2.66 | |
| Natural gas, with realized derivatives ($/Mcf) | 1.16 | 2.31 | |
| Natural gas realized derivatives ($MM) | — | (7.0) | |
| Selected financial data ($MM): | |||
| Revenues: | |||
| Crude oil revenues | $ 678.9 | $ 650.9 | |
| NGL revenues | 47.3 | 62.2 | |
| Natural gas revenues | 22.1 | 53.1 | |
| Total oil, NGL and natural gas revenues | $ 748.3 | $ 766.2 | |
| Cash flows: | |||
| Net cash provided by operating activities: | $ 406.7 | $ 468.8 | |
| Non-GAAP financial measures(1): | |||
| Adjusted EBITDA | $ 464.8 | $ 408.3 | |
| Adjusted Free Cash Flow(2) | 199.6 | 198.6 | |
| Adjusted Net Income | 218.1 | 194.4 | |
| Select operating expenses: | |||
| Lease operating expenses (“LOE”) | $ 159.2 | $ 153.4 | |
| Gathering, processing and transportation expenses (“GPT”) | 54.0 | 37.0 | |
| Production taxes | 63.9 | 60.5 | |
| Depreciation, depletion and amortization | 168.9 | 133.8 | |
| Total select operating expenses | $ 446.0 | $ 384.7 | |
| Earnings per share: | |||
| Basic earnings per share | $ 4.79 | $ 7.13 | |
| Diluted earnings per share | 4.65 | 6.87 | |
| Adjusted diluted earnings per share (Non-GAAP)(1) | 5.10 | 4.49 |
| ___________________ | |
| (1) | Non-GAAP financial measure. See “Non-GAAP Financial Measures” below for a reconciliation to the most directly comparable financial measures under GAAP. |
| (2) | 1Q24 Adjusted Free Cash Flow includes $3.9MM of reimbursed non-operated capital. |
Capital Expenditures:
The following table presents the Company’s total capital expenditures (“CapEx”) by category for the period presented:
| 1Q24 | |
| CapEx ($MM): | |
| E&P(1) | $ 257.7 |
| Other | — |
| Total E&P and other CapEx(1) | 257.7 |
| Capitalized interest | 0.7 |
| Total CapEx | $ 258.4 |
| ___________________ | |
| (1) | 1Q24 includes $3.9MM of reimbursed non-operated capital. |
Return of Capital:
Chord declared a base-plus-variable cash dividend of $2.94 per share of common stock, including a base dividend of $1.25 per share of common stock and a variable dividend of $1.69 per share of common stock. The dividends will be payable on June 5, 2024 to shareholders of record as of May 22, 2024. Details regarding the calculation of the variable dividend can be found in the Company’s most recent investor presentation located on its website at https://ir.chordenergy.com/presentations.
During 1Q24, the Company repurchased 193,269 shares of common stock at a weighted average price of $155.20 per share totaling $30.0MM. Additionally, the Company purchased 279,587 shares of common stock for $46.1MM associated with tax withholdings on vested equity-based compensation awards.
As of March 31, 2024, the Company had $653.0MM of capacity remaining on its $750MM share repurchase program.
Balance Sheet and Liquidity:
The following table presents key balance sheet data and liquidity metrics as of March 31, 2024 (in millions):
| March 31, 2024 | |
| Revolving credit facility(1) | $ 1,000.0 |
| Revolver borrowings | $ — |
| Senior notes | 400.0 |
| Total debt | $ 400.0 |
| Cash and cash equivalents | $ 296.4 |
| Letters of credit | $ 8.9 |
| Liquidity | $ 1,287.5 |
| ___________________ | |
| (1) | $2.5B borrowing base and $1.0B of elected commitments. |
Contact:
Chord Energy Corporation
Bob Bakanauskas, Managing Director, Investor Relations
(281) 404-9600
[email protected]
Conference Call Information
Investors, analysts and other interested parties are invited to listen to the webcast:
To join the conference call by phone without operator assistance (including sell-side analysts wishing to ask a question), you may register and enter your phone number at https://emportal.ink/3JrAorT to receive an instant automated call back and be immediately placed into the call.
You may also use the following dial-in information to join the conference call by phone with operator assistance:
| Dial-in: | 1-800-836-8184 | |
| Intl. Dial-in: | 1-646-357-8785 | |
| Conference ID: | 34205 |
A recording of the conference call will be available beginning at 1:00 p.m. Central on the day of the call and will be available until Wednesday, May 15, 2024 by dialing:
| Replay dial-in: | 1-888-660-6345 |
| Intl. replay: | 1-646-517-4150 |
| Replay access: | 34205 # |
The call will also be available for replay for approximately 30 days at https://www.chordenergy.com
No Offer or Solicitation
This communication does not constitute an offer to sell or the solicitation of an offer to subscribe for or buy any securities or a solicitation of any vote or approval with respect to the pending arrangement between Chord and Enerplus (the “Arrangement”) or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
Important Additional Information
In connection with the Arrangement, Chord and Enerplus have filed, or intend to file, materials with the Securities and Exchange Commission (the “SEC”) and on SEDAR+, as applicable. Chord filed a definitive Proxy Statement on Schedule 14A (the “Proxy Statement”) with the SEC in connection with the solicitation of proxies to obtain Chord stockholder approval of the Arrangement, and Enerplus filed an information circular and proxy statement (the “Circular”) with the TSX and on SEDAR+ in connection with the solicitation of proxies to obtain Enerplus shareholder approval of the Arrangement. Chord has also mailed the Proxy Statement to the stockholders of Chord. This communication is not a substitute for the Proxy Statement, the Circular or for any other document that Chord or Enerplus may file with the SEC or on SEDAR+ and/or send to Chord stockholders and/or Enerplus’ shareholders in connection with the Arrangement. INVESTORS AND SECURITY HOLDERS OF CHORD AND ENERPLUS ARE URGED TO CAREFULLY AND THOROUGHLY READ THE PROXY STATEMENT AND THE CIRCULAR, RESPECTIVELY, AS EACH MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME, AND OTHER RELEVANT DOCUMENTS FILED BY CHORD AND/OR ENERPLUS WITH THE SEC OR ON SEDAR+, WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT CHORD, ENERPLUS, THE ARRANGEMENT, THE RISKS RELATED THERETO AND RELATED MATTERS.
Stockholders of Chord and shareholders of Enerplus are able to obtain free copies of the Proxy Statement and the Circular, as each may be amended from time to time, and other relevant documents filed by Chord and/or Enerplus with the SEC or on SEDAR+ (when they become available) through the website maintained by the SEC at www.sec.gov or on SEDAR+ at www.sedarplus.ca, as applicable. Copies of documents filed with the SEC by Chord are available free of charge from Chord’s website at www.chordenergy.com under the “Investors” tab or by contacting Chord’s Investor Relations Department at (281) 404-9600 or [email protected]. Copies of documents filed with the SEC or on SEDAR+ by Enerplus are available free of charge from Enerplus’ website at www.enerplus.com under the “Investors” tab or by contacting Enerplus’ Investor Relations Department at (403) 298-1707.
Participants in the Solicitation
Chord, Enerplus and their respective directors and certain of their executive officers and other members of management and employees may be deemed, under SEC rules, to be participants in the solicitation of proxies from Chord’s stockholders and Enerplus’ shareholders in connection with the Arrangement. Information regarding the executive officers and directors of Chord is included in its definitive proxy statement for its 2024 annual meeting under the headings “Item 1 – Election of Directors,” “Executive Officers,” “Compensation Discussion and Analysis,” “Executive Compensation Matters” and “Security Ownership of Certain Beneficial Owners and Management,” which was filed with the SEC on March 19, 2024 and is available at https://www.sec.gov/ixviewer/ix.html?doc=/Archives/edgar/data/1486159/000148615923000007/chrd-20230316.htm. Information regarding the directors and certain executive officers of Enerplus is included in its information circular and proxy statement for its 2024 annual meeting under the headings “Director Compensation” and “Executive Compensation”, which was filed on SEDAR+ on April 4, 2024 and is available at https://www.sec.gov/Archives/edgar/data/1126874/000110465923041270/tm235372d3_ex99-2.htm. Additional information regarding the persons who may be deemed participants and their direct and indirect interests, by security holdings or otherwise, is set forth in the Proxy Statement and the Circular, and may be set forth in other materials when they are filed with the SEC or on SEDAR+ in connection with the Arrangement. Free copies of these documents may be obtained as described in the paragraphs above.
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