Epsilon Energy Ltd (EPSN) 2024 Q2 法說會逐字稿

Good day, and welcome to the Epsilon Energy second quarter 2024 earnings conference call.

美好的一天，歡迎參加 Epsilon Energy 2024 年第二季財報電話會議。

(Operator Instructions) Please note, this event is being recorded.

（操作員說明）請注意，正在記錄此事件。

I would now like to turn the conference over to our Chief Financial Officer, Mr. Andrew Williamson.

我現在想將會議轉交給我們的財務長安德魯威廉森先生。

Please go ahead, sir.

請繼續，先生。

Thank you, operator.

謝謝你，接線生。

And on behalf of the management team, I would like to welcome all of you to today's conference call to review Epsilon's Second Quarter 2024 Financial and Operational Results.

我謹代表管理團隊歡迎大家參加今天的電話會議，回顧 Epsilon 2024 年第二季的財務和營運表現。

Before we begin, I'd like to remind you that our comments may include forward-looking statements.

在開始之前，我想提醒您，我們的評論可能包含前瞻性陳述。

It should be noted that a variety of factors could cause Epsilon's actual results to differ materially from the anticipated results or expectations expressed in these forward-looking statements.

應該指出的是，多種因素可能導致 Epsilon 的實際結果與這些前瞻性陳述中表達的預期結果或期望有重大差異。

Today's call may also contain certain non-GAAP financial measures.

今天的電話會議也可能包含某些非公認會計準則財務指標。

Please refer to the earnings release that we issued yesterday for disclosures on forward-looking statements and reconciliations of non-GAAP measures.

請參閱我們昨天發布的收益報告，以了解前瞻性陳述的揭露和非公認會計準則措施的調節。

With that, I'd like to turn the call over to Jason Stabell, our Chief Executive Officer.

說到這裡，我想將電話轉給我們的執行長傑森·斯塔貝爾 (Jason Stabell)。

Thank you, Andrew.

謝謝你，安德魯。

Good morning, and thank you for participating in our second quarter 2024 conference call.

早安，感謝您參加我們的 2024 年第二季電話會議。

Joining me today are Andrew Williamson, our CFO; and Henry Clanton, our COO.

今天加入我的是我們的財務長安德魯威廉森 (Andrew Williamson)；以及我們的營運長亨利·克蘭頓 (Henry Clanton)。

We will be available to answer questions later in the call.

我們將在稍後的電話會議中回答問題。

Our Permian business remains a bright spot.

我們的二疊紀業務仍然是一個亮點。

These assets contributed approximately 50% of our quarterly revenue and 75% of our cash flow, despite the fact that several wells were off-line for more than two weeks during the quarter due to offset completion activities.

儘管由於補償完井活動，本季有幾口油井停產超過兩週，但這些資產貢獻了我們約 50% 的季度收入和 75% 的現金流。

In the third quarter, we expect volumes in the Permian to increase sequentially for the sixth consecutive quarter.

在第三季度，我們預計二疊紀盆地的產量將連續第六個季度較上季成長。

In Pennsylvania, natural declines and continued curtailments resulted in decreased revenues and volumes for the quarter.

在賓州，自然下降和持續削減導致本季收入和銷售下降。

We remain extremely leveraged to a rebound in natural gas prices, with our combination of curtailed volumes and deferred TILs representing the potential for an initial uplift of more than 100% of current net production.

我們對天然氣價格反彈的槓桿作用仍然很大，我們的產量削減和遞延 TIL 的結合代表著初步提升當前淨產量 100% 以上的潛力。

The 12-month natural gas strip has continued to deteriorate over the summer, so we support the proactive approach of our operator to remove and defer volumes in an oversupplied gas market.

夏季，為期 12 個月的天然氣帶持續惡化，因此我們支持營運商採取積極主動的做法，在天然氣市場供應過剩的情況下消除和推遲產量。

Overall, the company remains well positioned to deliver meaningful volume and cash flow growth in 2025, with several potential interim value catalysts.

總體而言，該公司仍處於有利位置，可在 2025 年實現有意義的銷售和現金流成長，並有幾個潛在的中期價值催化劑。

The first of which is the ongoing sale process of our operator in Ector County, where we expect an update before year-end.

第一個是我們在埃克託縣的營運商正在進行的銷售流程，我們預計在年底前進行更新。

The second potential catalyst is our ongoing business development efforts in new areas, matched with our strong liquidity position that will allow us to take advantage of attractive opportunities that become available.

第二個潛在的催化劑是我們在新領域持續開展業務的努力，再加上我們強大的流動性狀況，這將使我們能夠利用可用的有吸引力的機會。

Now I'd like to turn the call over to Andrew for additional comments.

現在我想將電話轉給安德魯以徵求更多意見。

Thanks, Jason.

謝謝，傑森。

We are expecting upstream cash flow from the Marcellus to trough in Q2, Q3 this year based on the current forward strip and as our curtailed and pending volumes come online.

根據目前的遠期條帶以及我們削減和待處理的數量的上線，我們預計今年第二季和第三季來自馬塞勒斯的上游現金流將達到低谷。

As I mentioned last quarter, we have a new rate regime for the gas gathering system, after executing a new gathering agreement in May that provides some clarity on the rate regime on the system going forward, which is a good thing as a system owner and shipper.

正如我上個季度提到的，在5 月執行新的收集協議後，我們對天然氣收集系統制定了新的費率制度，該協議對系統未來的費率制度提供了一定的明確性，這對於系統所有者來說是一件好事，托運人。

That said, gathering revenues will continue to come down until curtailments are lifted and incremental new development volumes from the dedicated Auburn leaseholder put through the system.

也就是說，收集的收入將繼續下降，直到取消限電並且來自專門的奧本承租人透過該系統增加新的開發量。

As Jason mentioned, we feel very good about the long-term viability of the asset, and are comfortable that midstream earnings will continue to underwrite most of our dividend.

正如傑森所提到的，我們對該資產的長期生存能力感到非常滿意，並且對中游收益將繼續承擔我們的大部分股息感到滿意。

However, we are leveraged to better gas prices on the midstream side as well.

然而，我們也可以利用槓桿來提高中游的天然氣價格。

We will see contribution and incremental volume growth from the recent development in the Permian in the third quarter, but we're uncertain on additional development there in the near term until the operator sale process is completed, which we expect will happen before year-end.

我們將在第三季看到二疊紀盆地近期開發的貢獻和增量成長，但在營運商出售流程完成之前，我們不確定短期內是否會進行額外開發，我們預計這將在年底前完成。

We expect and are eager to participate in more development there once that happens.

一旦發生這種情況，我們期望並渴望參與那裡的更多開發。

We've been active looking at new opportunities, and we're excited about the potential of adding additional areas to deploy capital, which we can do comfortably with our liquidity position and improving cash flow profile.

我們一直在積極尋找新的機會，我們對增加更多領域來部署資本的潛力感到興奮，我們可以透過我們的流動性狀況和改善現金流狀況輕鬆做到這一點。

Our focus this year has been in Canada, where we see a number of potentially attractive opportunities.

今年我們的重點是加拿大，在那裡我們看到了許多潛在的有吸引力的機會。

We will keep you updated as things progress.

隨著事情的進展，我們將隨時向您通報最新情況。

As announced in June, our borrowing base was redetermined higher to $45 million, with lender commitments at the same amount, after adding in our Texas production and despite the temporary challenges in the Marcellus.

正如 6 月宣布的那樣，儘管馬塞勒斯地區面臨暫時的挑戰，但在增加我們德克薩斯州的產量後，我們的借款基礎重新確定為 4500 萬美元，貸款人承諾的數額相同。

Now I'll turn it over to Henry for operations.

現在我將把它交給亨利來操作。

Thank you, Jason and Andrew.

謝謝你們，傑森和安德魯。

We continue to build meaningful value in the Permian Basin.

我們繼續在二疊紀盆地創造有意義的價值。

Flowback operations began in July on the seventh horizontal well in the Pradera Fuego project.

Pradera Fuego 專案的第七口水平井於 7 月開始返排作業。

This is the southernmost well drilled to date, crossing into the greater than 11,000-acre undevelopment block.

這是迄今為止鑽探的最南端的井，穿越了超過 11,000 英畝的未開發區塊。

Early productivity results are meeting predrill expectations and more importantly, are further confirming productivity of the interval in this significant development runway.

早期生產力結果滿足了鑽探前的預期，更重要的是，進一步證實了這條重要開發跑道的區間生產力。

Peak production of the well is expected during August, adding to the meaningful growth in production from the project.

預計該井的生產高峰期將在八月份，這將進一步推動該專案產量的顯著成長。

Recent spacing test in the play by leading operators indicate initial pad development of up to four wells per section, minimizing potential parent-child risks, an increase over our spacing guidance last quarter.

領先營運商最近對該區域的間距測試表明，每個區域的初始墊開發最多為四口井，最大限度地減少了潛在的親子風險，比我們上季度的間距指導有所增加。

The undeveloped status of the acreage block to the south of the existing wells provides for a thoughtfully planned full field development, including water supply and disposal infrastructure that can meaningfully reduce development costs moving forward.

現有油井以南面積塊的未開發狀態提供了經過深思熟慮的全面油田開發，包括供水和處理基礎設施，可顯著降低未來的開發成本。

As reported previously, evaluation efforts continue on a second perspective interval, the Woodford.

如同先前所報導的，評估工作仍在第二個視角區間（伍德福德）上繼續進行。

Analysis of the recent core taken within the acreage through the Woodford interval demonstrates high organic content and thermal maturity similar to the Barnett.

對 Woodford 區間範圍內最近採集的岩心進行的分析表明，有機物含量高，熱成熟度與 Barnett 相似。

The thickness of the interval, coupled with offset well performance, suggests prospectivity worthy of appraisal.

此層段的厚度，加上偏置井的表現，顯示其前景值得評估。

In the Marcellus, we continue to support the production curtailments and delayed TILs of the new drills during this current low-price environment.

在 Marcellus，我們繼續支持在當前的低價環境下削減產量並推遲新鑽機的 TIL。

Now back to Jason.

現在回到傑森。

Thanks, guys.

謝謝，夥計們。

Operator, we can now open the line for questions.

接線員，我們現在可以開通提問線路了。

Jason Stabell

賈森·斯塔貝爾

Thank you, operator.

謝謝你，接線生。

I appreciate your interest in Epsilon and joining us today.

感謝您對 Epsilon 的興趣並今天加入我們。

And as always, if you have any questions, please contact us here in Houston.

像往常一樣，如果您有任何疑問，請與我們在休斯頓聯繫。

Thanks, and have a great day.

謝謝，祝你有美好的一天。

The conference has now concluded.

會議現已結束。

Thank you for attending today's presentation.

感謝您參加今天的演講。