Vital Energy Inc (VTLE) 2022 Q3 法說會逐字稿

Ladies and gentlemen, thank you for standing by, and welcome to the Q3 2022 Laredo Petroleum, Inc. Earnings Conference Call. I would now like to turn the call over to Ron Hagood, Vice President of Investor Relations. Please go ahead.

女士們，先生們，感謝各位的收看，歡迎參加拉雷多石油公司2022年第三季業績電話會議。現在，我想將電話交給投資者關係副總裁Ron Hagood。請開始。

Thank you, and good morning. Joining me today are Jason Pigott, President and Chief Executive Officer; Bryan Lemmerman, Senior Vice President and Chief Financial Officer; as well as additional members of our management team.

謝謝大家，早安。今天與我一同出席的還有總裁兼執行長Jason Pigott、資深副總裁兼財務長Bryan Lemmerman，以及我們管理團隊的其他成員。

During today's call, we will be making forward-looking statements. These statements, including those describing our beliefs, goals, expectations, forecasts and assumptions, are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Our actual results may differ from these forward-looking statements for a variety of reasons, many of which are beyond our control.

在今天的電話會議中，我們將做出前瞻性陳述。這些陳述，包括描述我們的信念、目標、預期、預測和假設的陳述，旨在涵蓋1995年《私人證券訴訟改革法》的安全港條款。我們的實際結果可能因各種原因而與這些前瞻性陳述不同，其中許多原因超出了我們的控制範圍。

In addition, we'll be making reference to non-GAAP financial measures. Reconciliations to GAAP financial measures are included in the press release and presentation we issued yesterday, detailing our financial and operating results for third quarter 2022. The press release and presentation can be accessed on our website at www.laredopetro.com.

此外，我們將參考非公認會計準則 (non-GAAP) 財務指標。我們昨天發布的新聞稿和簡報中包含了與公認會計準則 (GAAP) 財務指標的對賬，其中詳細介紹了我們 2022 年第三季的財務和營運業績。新聞稿和簡報可在我們的網站 www.laredopetro.com 上查閱。

I will now turn the call over to Jason Pigott, President and Chief Executive Officer.

現在我將電話轉給總裁兼執行長 Jason Pigott。

Thanks, Ron, and good morning, everyone. Thanks for joining us today. We appreciate your interest in our company. Financially, the third quarter was another good one for Laredo as we continued to execute our proven plan to add long-term value. We continue to benefit from strong commodity prices and maintain capital discipline to preserve our margins and manage our ongoing inflationary pressures.

謝謝，羅恩，大家早安。感謝您今天加入我們。感謝您對我們公司的關注。從財務角度來看，第三季對拉雷多來說又是一個良好的業績，因為我們繼續執行我們行之有效的增值計劃。我們繼續受益於強勁的大宗商品價格，並維持資本紀律，以維持利潤率並管理持續的通膨壓力。

There are a few highlights I would like to review. First, we generated $51 million of free cash flow in the third quarter. Second, we used this cash flow and cash on hand to repurchase a combined $170 million of debt and equity, strengthening our balance sheet to a leverage ratio of 1.25x. And finally, capital investments in the quarter were similar to last quarter with a consistent pace, 2 drilling rigs and 1 completions crew. We will maintain similar levels of activity in the fourth quarter and plan to invest $135 million to $145 million.

我想回顧一下幾個亮點。首先，我們在第三季創造了5,100萬美元的自由現金流。其次，我們利用這筆現金流和庫存現金回購了總計1.7億美元的債務和股權，將我們的資產負債表的槓桿率提升至1.25倍。最後，本季的資本投資與上一季相似，節奏穩定，新增了2台鑽井平台和1支完井隊伍。我們將在第四季度保持類似的投資水平，並計劃投資1.35億至1.45億美元。

Third quarter production was pre-released a few weeks ago. Total production was within our previous range, oil volumes came in below expectations. Production from Howard County was negatively impacted by high levels of completions activity by offset operators that impacted some of our larger volume recently developed pad. We coordinate the management of producing wells with offset operators, but the recent impacts were greater than modeled.

第三季產量已於幾週前預先公佈。總產量在我們先前的預期範圍內，但石油產量低於預期。霍華德縣的產量受到補償業者大量完井活動的負面影響，這影響了我們近期開發的一些產量較大的區塊。我們與補償業者協調了生產井的管理，但近期的影響比模型預測的要大。

The strong returns industry is seeing in Howard County, we have no reason to believe that activity levels will decrease in the near future. We have adjusted our forecast to ensure that our estimates in the future better reflect the timing and impact of offset activity.

鑑於霍華德縣的行業回報強勁，我們沒有理由相信其活動水平在不久的將來會下降。我們已調整預測，以確保未來的估算能更好地反映抵消活動的時機和影響。

We included a production graph on Slide 5 of our earnings presentation plotting all Laredo operated wells in Howard County that have been frac impacted. (inaudible) demonstrates that following a frac impact, wells returned to their pre-frac impacted production curve. Timing and radius of the impacted wells are the larger drivers of our forecast change rather than reduced post per frac well performance.

我們在收益簡報的第5張幻燈片中繪製了一張產量圖表，其中標出了霍華德縣所有受壓裂影響的拉雷多營運油井。 （聽不清楚）表明，在壓裂影響之後，油井的產量曲線恢復到了壓裂影響之前的水平。受影響油井的發生時間和半徑是我們預測變化的主要驅動因素，而非壓裂後單井產量的下降。

We've taken significant steps to ensure that our future performance will be stronger and more predictable. Recently restructured our operations team, eliminating the COO position. These duties were immediately assumed by Kyle Coldiron, VP of Subsurface and Business Development, (inaudible) a new team member, Katie Hill, VP of Operations. These leaders now report directly to me and increase our focus on these 2 distinct parts of our business.

我們已採取重大舉措，確保未來業績更加強勁、更具可預測性。我們最近重組了營運團隊，取消了營運長職位。這些職責立即由地下油氣和業務發展副總裁凱爾·科爾迪隆（Kyle Coldiron）和新加入的營運副總裁凱蒂·希爾（Katie Hill）接任。這些領導現在直接向我匯報，並將重點放在這兩個不同的業務領域。

I'm extremely confident in their ability to deliver in the coming quarters. While we've had some challenges this quarter, I would like to reiterate some of the progress we've made on our journey over the last couple of years, (inaudible) of our investor deck. We list a few of the more dramatic changes we have made as a company since 2019 compared to current year-to-date performance.

我對他們在未來幾季的業績充滿信心。雖然本季我們遇到了一些挑戰，但我想重申過去幾年我們在投資者平台（聽不清楚）的一些進展。我們列出了自2019年以來，與年初至今的業績相比，我們公司所做的一些重大改變。

Just to name a few of those highlights. First, we increased our liquidity 61% to $1.050 billion, grew oil production 28% and we reduced our leverage ratio 38% to 1.25x. Before I turn the call over to Bryan, I would like to cover a few items concerning 2023.

僅列舉其中幾個亮點。首先，我們的流動性增加了61%，達到10.5億美元，石油產量增加了28%，槓桿率降低了38%，至1.25倍。在將電話交給布萊恩之前，我想先談談與2023年相關的一些事項。

First, we are highly confident in our business plan. We have all the key components in place today to create value. High-quality assets, a deep inventory, effective risk management and a team of professionals aligned on the importance of delivering our key objectives. Our focus on capital discipline remained unchanged in 2023, and we expect that we will again deliver free cash flow, reduce debt, strengthen our balance sheet and methodically return cash to shareholders through our buyback program.

首先，我們對我們的業務計劃充滿信心。我們目前已具備創造價值的所有關鍵要素。高品質的資產、豐富的庫存、有效的風險管理以及一支專業團隊，他們一致認同實現我們的關鍵目標的重要性。 2023年，我們對資本紀律的重視保持不變，我們預計我們將再次實現自由現金流，減少債務，增強資產負債表，並透過回購計畫有序地向股東返還現金。

For activity levels in 2023, we expect to continue to run our current 2-rig drilling program for the full year. We will also add a spot crew in addition to the existing crew similar to 2022. The continued drilling efficiency improvements experienced year-to-date will enable us to complete 6 more wells in '23 than we did in '22. This activity level is expected to generate mid-single-digit oil production growth full year 2023 compared to the fourth quarter of 2022.

就2023年的作業水準而言，我們預計全年將繼續運作目前的雙鑽機鑽井計畫。除現有人員外，我們還將增加一個現場作業隊，與2022年類似。年初至今持續的鑽井效率提升將使我們在2023年比2022年多完成6口井。預計這一作業水準將使2023年全年石油產量較2022年第四季實現中等個位數成長。

We are working with all of our service providers to ensure Laredo's high safety standards while securing quality equipment and labor at the best rate. In addition, we are monitoring commodity markets and will continue to utilize derivative markets to ensure we lock in returns and have high certainty in our cash flows. Consistent with past practice, we plan to issue 2023 guidance early next year following our internal reviews and Board approval.

我們正在與所有服務提供者合作，確保拉雷多的高安全標準，同時以最優價格獲得優質的設備和勞動力。此外，我們正在密切關注大宗商品市場，並將繼續利用衍生性商品市場來鎖定回報，並確保現金流的高度確定性。與以往的做法一致，我們計劃在內部審查和董事會批准後，於明年初發布2023年業績指引。

I will now turn the call over to Bryan for a financial update.

現在我將把電話轉給布萊恩，讓他報告一下財務最新情況。

Thank you, Jason. Third quarter, we continued to strengthen our balance sheet and return cash to shareholders. During the quarter, we repurchased $152.5 million base value of term debt at 98% of par. Through Tuesday, November 2, we have repurchased a total of $245 million face value of term debt at 99.2% of par. Of the repurchases, $90.9 million base value have been of our 2025 notes, increasing our flexibility as these notes need to be refinanced or redeemed in the next year or so.

謝謝傑森。第三季度，我們持續增強資產負債表，並向股東返還現金。本季度，我們以票面利率的98%回購了1.525億美元的定期債券。截至11月2日（星期二），我們已回購了總計2.45億美元的定期債券，票面利率為票面利率的99.2%。在這些回購中，9,090萬美元的票面利率為2025年到期的債券，這提高了我們的靈活性，因為這些債券需要在未來一年左右進行再融資或贖回。

These repurchases have been funded through cash on hand and free cash flow, enabling us to reduce annual interest expense by approximately $21 million. During the quarter, we reduced total net debt to $1.14 billion. We ended the quarter with $40 million drawn on our $1 billion credit facility and had roughly $50 million of cash on hand. As of November 2, we had paid our revolver balance to 0 and hold cash of approximately $54 million.

這些回購資金來自庫存現金和自由現金流，使我們年度利息支出減少了約2,100萬美元。本季度，我們將淨債務總額降至11.4億美元。本季末，我們已從10億美元的信貸額度中提取了4,000萬美元，庫存現金約為5,000萬美元。截至11月2日，我們的循環信貸餘額已清零，持有現金約5,400萬美元。

On November 1, we finalized our semiannual RBL redetermination process with our bank group. As part of this process, our borrowing base was increased to $1.3 billion from $1.25 billion and our elected commitments were maintained at $1 billion. The other significant change was that our restricted payments baskets have been simplified and brought in line with where the market is today.

11月1日，我們與銀行集團完成了半年度RBL重新確定流程。作為此流程的一部分，我們的借款基數從12.5億美元增加到13億美元，我們的選定承諾額度將維持在10億美元。另一項重大變化是，我們的限制性支付籃子已簡化，並與當前的市場狀況保持一致。

This gives us more flexibility with regard to debt and equity repurchases as long as we remain in compliance with standard ratio tests. During the quarter, we returned $17.5 million of cash to shareholders through our equity repurchase program. From November 2, we have repurchased a total of $34 million of equity, were approximately 442,000 shares at an average price of $77.

只要我們遵守標準比率測試，這就能讓我們在債務和股權回購方面擁有更大的靈活性。本季度，我們透過股權回購計畫向股東返還了1,750萬美元現金。自11月2日起，我們已回購了總計3,400萬美元的股權，約44.2萬股，平均價格為77美元。

With that, I will turn the call over to the operator. Please open the line for questions.

說完這些，我將把電話轉給接線生。請打開熱線，以便提問。

(Operator Instructions) Our first question comes from the line of John Annis from Stifel.

（操作員指示）我們的第一個問題來自 Stifel 的 John Annis。

For my first question, I wanted to focus on Slide 5 and specifically the frac impact period you saw in Howard County. Could you share your expectations on whether you expect similar frac impacts to occur in the future? And how you are approaching this from an operational planning and guidance perspective?

我的第一個問題，我想重點談談幻燈片5，特別是您在霍華德縣看到的壓裂影響期。您能否分享一下您對未來是否會發生類似的壓裂影響的預期？以及您從營運規劃和指導的角度如何應對這個問題？

We'll let Kyle Coldiron, who's Head of our Planning and Subsurface, talk to you about that.

我們將讓規劃和地下工程主管 Kyle Coldiron 與您討論這個問題。

Yes. Thanks, Ron. So ultimately, the way that we did this analysis and what we're communicating here is that we went back and looked at all of our wells in Howard County that have experienced a frac impact over the last 4 years. And we basically kind of normalized them in terms of the pre-frac hit period and then the post frac hit kind of after they've cleaned up and experienced the frac hit. And what you can see here is that the wells ultimately return to their prior production rates, and we're not seeing a long-term impact as a result of that frac hit.

是的。謝謝，Ron。最終，我們進行這項分析的方式以及我們在此傳達的訊息是，我們回顧了霍華德縣過去四年內所有遭受壓裂影響的油井。我們基本上根據壓裂前的衝擊期和壓裂後的衝擊期（也就是它們清理完畢並經歷了壓裂衝擊之後）對它們進行了標準化。您可以看到，這些油井最終恢復到了先前的產量，我們並沒有看到壓裂衝擊造成的長期影響。

So ultimately, this well set has both wells that are older that have been online for a number of years and wells that are newer and have only been online for a few months. And so you can see across that type of well set, we're not seeing a big impact. So we have decided to increase the radius of our expectation of wells that will be impacted by offsetting frac impact. We've effectively doubled that from what we've assumed in the past.

所以最終，這套井組既包括已經投產多年的老井，也包括剛投產幾個月的新井。所以，你可以看到，在這類井組中，我們並沒有看到很大的影響。因此，我們決定擴大受壓裂補償影響的井的預期範圍。實際上，我們已將其範圍比過去的預期擴大了一倍。

And we've also given older wells a little bit longer time in our modeling to clean up prior to returning to their previous rates. So that's some of the changes that we've made in our expectations going forward. But the key takeaway here is that the wells returned to their previous rates. And really, what we're seeing is a deferral of production, not a loss of production due to well productivity.

我們在模型中也為老井預留了更長的清理時間，使其能夠恢復到先前的產量。以上就是我們對未來預期所做的一些調整。但關鍵在於，這些油井已經恢復到了先前的產量。實際上，我們看到的是產量的延遲，而不是油井產能下降而導致的產量損失。

That makes sense. And then for my follow-up, there's been a lot of attention this earnings season on co-development approaches and impacts on wealth productivity. Could you provide some details on how you view your program differently versus peers and their approaches that are now just changing?

這很有道理。接下來我想問一下，在這個財報季，大家非常關注共同開發的方法及其對財富生產力的影響。您能否詳細介紹一下，您如何看待您的專案與同行及其正在改變的方法有何不同？

Yes. So ultimately, what we think we found is the right mix of completion size and well spacing. If you look at our development in North Howard, there on Slide 5, you can see our North Howard well performance is very strong. Our original 2 packages in Central Howard, which are the orange lines, you can see those were a little bit tightly spaced relative to what we're doing today, and you can see the result of that on that plot.

是的。所以最終，我們認為我們找到了正確的完井規模和井距組合。如果您查看我們在北霍華德的開發情況（幻燈片5），您會發現我們的北霍華德井性能非常強勁。我們最初在中霍華德的兩個項目（橙色線）的井距與我們目前的工作相比略微緊湊，您可以在該圖上看到結果。

So we feel like we've got a good combination of well spacing and frac size. Other operators sometimes can space tighter with smaller fracs, some go a little bit wider with bigger fracs. But ultimately, with our acreage and our footprint, we think we found the right combination.

所以，我們覺得我們的井距和壓裂規模已經達到很好的組合了。其他業者有時會採用較小的壓裂規模，將井距縮窄；而有些業者則會採用較大的壓裂規模，將井距擴寬。但最終，考慮到我們的油田面積和業務覆蓋範圍，我們認為我們找到了最合適的組合。

Your next question comes from the line of Karl Blunden from Goldman Sachs.

您的下一個問題來自高盛的卡爾布倫登 (Karl Blunden)。

Thanks so much for the time. Really good work on addressing your liabilities and moving your maturity wall back and cutting it down. I was just interested on 2025. Those do become -- well, the coal price steps down in January. As you think about liquidity, is that something that would be a priority for you to take out when the coal price steps down? Or would you like to maintain a bit more liquidity and be more measured about the further reduction of that maturity?

非常感謝您的寶貴時間。您在處理負債問題、降低期限和縮短期限方面做得非常好。我只是對2025年有興趣。這些期限確實會……嗯，煤炭價格會在一月下降。當您考慮流動性時，煤炭價格下降時您會優先考慮哪些資產？還是您希望保持更多的流動性，並在進一步縮短期限方面更加謹慎？

Sure. This is Bryan. As we've said, what we plan to do is pay these down pretty much in line with cash flow. So as we approach 2023 with prices a bit lower than they had been predicted a few months back. I think we will address this as it gets closer. As you mentioned, the liquidity is a key component right now. We have $1 billion of liquidity, which puts us in a good space for acquisitions. So we want to be careful to maintain that.

當然。我是布萊恩。正如我們所說，我們計劃根據現金流情況償還這些債務。因此，隨著2023年臨近，價格會比幾個月前的預測略低。我想我們會在臨近時解決這個問題。正如您所說，流動性是目前的關鍵因素。我們擁有10億美元的流動性，這為我們進行收購提供了良好的空間。因此，我們希望謹慎地保持這種流動性。

With the RBL redetermination process completed earlier this week, we have the flexibility to basically call those bonds whenever we want and bring them on to the revolver. So there's not a rush. I can do it anytime between now and a year from January. The main item would be maintain that flexibility and making the right financial decisions. So we'll monitor that as we get closer and address it that way.

隨著本週早些時候RBL重新確定流程的完成，我們基本上可以隨時靈活地撤銷這些債券，並將其納入循環信貸機制。所以不必著急。從現在到明年一月，我可以隨時這麼做。關鍵在於保持這種靈活性，並做出正確的財務決策。因此，我們會在臨近時進行監控，並以此為基礎進行處理。

Your next question comes from the line of Zach Parham from JPMorgan.

您的下一個問題來自摩根大通的 Zach Parham。

Jason, you talked a little bit about your production expectations for 2023 in your prepared comments. But could you give us a little color on how you're thinking about capital in '23? Maybe what you're thinking as far as year-over-year inflation compared to what you're seeing this year?

傑森，你在準備好的評論中談到了對2023年產量的預期。能否稍微談談你對2023年資本的看法？例如，與今年相比，你對年比通膨的看法如何？

Yes. Thanks for the question, Zach. We expect to be around $590 million for the year. Right now, best estimates are around 10% inflation would be a good factor to put in there. And that puts us right around where consensus is. So I think that's where we are today. We're still going through the budgeting process right now.

是的。謝謝你的提問，扎克。我們預計今年的預算約為5.9億美元。目前，最佳估計是，將10%左右的通膨率納入預算是一個不錯的選擇。這與我們目前的共識差不多。所以我認為我們目前的預算狀況就是這樣。我們目前仍在進行預算編制。

We will have, again, a few more completions, but we'll also have less wells being drilled because we've built some kind of DUCs as we've gone into the end of this year. So that's kind of the plan, I think where we'll be but we're still going through the process of finalizing our budget, and we'll come out with those details early next year.

我們也會再有一些完井，但鑽井數量也會減少，因為我們在年底前建造了一些DUC（待鑽井平台）。所以，這就是我們的計劃，我想我們會達到這樣的水平，但我們仍在最終確定預算，具體細節將於明年初公佈。

Zach, to clarify, when Jason said $590 million for the year, he's referring to 2022 and the 10% is relative to '23 relative to '22.

札克，​​需要澄清的是，傑森說今年的營收為 5.9 億美元，他指的是 2022 年，而 10% 是相對於 2023 年相對於 2022 年而言的。

Got it. And then I guess just a follow-up on the buyback. With the commodity strip in backwardation and leverage still above 1, do you have any thoughts on potentially slowing the buyback in the near term to focus more on debt reduction? Just really, I guess, in general thoughts on how you think about the buyback over -- the pace of the buyback over the near and longer term?

明白了。接下來我想問關於回購的問題。鑑於大宗商品期貨處於現貨溢價狀態，且槓桿率仍高於1，您是否考慮過在短期內放緩回購步伐，以便將更多精力放在削減債務上？您對於回購的整體看法是－短期和長期的回購節奏如何？

Yes. I think as we've seen price come back, slowing it down as a ratio to total cash going to both the bond and the equity repurchase programs. it has come back a little bit. As we move into next year, we will definitely use commodity price and free cash flow as a determining factor of how much and what ratio.

是的。我認為，隨著價格回升，用於債券和股票回購計畫的現金總額佔比有所放緩。目前來看，回升幅度略有回升。進入明年，我們肯定會將商品價格和自由現金流作為決定回升幅度和比例的因素。

Right now, I'd say keeping at the ratio we were is a decent plan. That would still not put us at using the whole thing, paying -- or using the whole $200 million by the end of next year. But if prices moved higher, I think we'd get more aggressive as prices move down, we get less aggressive. And our primary focus is still on debt reduction. That is the most important thing to us and then just keeping the equity repurchase program on a methodical pace.

目前，我認為保持目前的比率是一個不錯的計劃。但這仍然不代表我們會用盡所有資金，或是在明年年底前用掉全部2億美元。但如果價格上漲，我認為我們會採取更激進的措施；價格下跌，我們就會放鬆警惕。我們的主要重點仍然是削減債務。這對我們來說是最重要的，然後就是維持股權回購計畫有條不紊地進行。

That does conclude today's questions. I would now like to turn the call over to the company for closing remarks.

今天的提問到此結束。現在，我想將電話交給公司代表，請他們發表結束語。

Thank you for joining us this morning. We appreciate your interest in Laredo, and this concludes today's call.

感謝您今天上午的參與。感謝您對拉雷多的關注，今天的電話會議到此結束。