Chord Energy Reports Fourth Quarter and Full-Year 2023 Financial and Operating Results, Declares Base and Variable Dividends and Issues 2024 Outlook

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HOUSTON, Feb. 21, 2024 /PRNewswire/ — Chord Energy Corporation (NASDAQ:CHRD) (“Chord”, “Chord Energy” or the “Company”) today reported financial and operating results for the fourth quarter and full-year 2023 and announced its 2024 outlook.

Operational and Financial Highlights:

Oil volumes of 106.2 MBopd and total volumes of 183.8 MBoepd in 4Q23 both exceeded the high-end of guidance. FY23 oil volumes were 99.8 MBopd with total volumes of 173.4 MBoepd;
E&P and other CapEx of $208.8MM in 4Q23 (including $3.5MM of reimbursed capital for divested non-operated assets) and $922.3MM in FY23 (including $14.5MM of reimbursed capital for divested non-operated assets) exceeded the high-end of guidance;
2023 volumes and capital reflect activity acceleration and higher working interest in operated wells, along with mild 4Q23 weather, lower downtime and strong well performance;
12 gross (9 net) operated turn-in-line (“TIL”) wells in 4Q23 (~80% three-mile). Reached total depth on all three-mile cleanouts in 4Q23;
Net cash provided by operating activities was $543.3MM and net income was $301.6MM in 4Q23; and
Adjusted EBITDA(1) was $480.9MM and Adjusted Free Cash Flow(1) was $247.4MM.

Shareholder Return Highlights:

4Q23 return of capital was set at $188MM, or 75% of Adjusted Free Cash Flow (excluding the $3.5MM of reimbursed capital);
Share repurchases totaled $82.8MM (weighted average price of $162.20 per share), including $53.0MM attributable to 4Q23 return of capital;
Declared a base-plus-variable cash dividend of $3.25 per share of common stock. See “Return of Capital” below for additional information; and
Return of capital paid in FY23 was approximately $646MM.

2024 Outlook Highlights:

E&P and other CapEx between $905MM – $945MM (~80% drilling and completions);
TIL 103 – 113 gross operated wells;
Holding oil volumes flat between 97 – 101 MBopd; and
Adjusted Free Cash Flow(1) of approximately $875MM at $79/Bbl WTI and $2.50/MMBtu Henry Hub using midpoint guidance.

(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 closed 2023 on sound footing by executing on its program and delivering strong volume growth in the second half of the year,” said Danny Brown, Chord Energy’s President and Chief Executive Officer. “2023 was a pivotal year for the Company as three-mile wells were approximately 50% of the mix, and execution and well performance continue to meet or exceed expectations. Chord’s deep inventory generates compelling economics and allows for low reinvestment rates, robust free cash flow and attractive return of capital. In 2023, Chord returned $646MM to shareholders through a mix of base and variable dividends supplemented by opportunistic share repurchases.”

Danny Brown continued, “As we look to this year, given the progress made and success achieved on extended laterals in 2023, three-mile wells will approximate two-thirds of the 2024 program. The Chord team will remain focused on driving continuous improvement and better efficiency throughout the organization. Our low-cost inventory, capital efficient development program and strong balance sheet continue to support sustainable free cash flow generation and high shareholder returns. At Chord, we remain excited about the oil and gas industry, the benefits we bring to the world, and are focused on sustainable value creation through responsible operations.”

4Q23 Operational and Financial Update:

The following table presents select 4Q23 operational and financial data compared to guidance released in November 2023:

Metric

4Q23 Actual

4Q23 Guidance

Oil volumes (MBopd)

106.2

102.0 – 105.0

NGL volumes (MBblpd)

38.1

35.5 – 36.5

Natural gas volumes (MMcfpd)

236.5

224.0 – 230.0

Total volumes (MBoepd)

183.8

174.8 – 179.8

Oil premium (discount) to WTI ($/Bbl)

$(0.52)

$(0.85) – $1.15

NGL realization (% of WTI)

17 %

13% – 23%

Residue gas realization (% of Henry Hub)

37 %

50% – 60%

LOE ($/Boe)

$10.05

$10.00 – $10.80

Cash GPT ($/Boe)(1)

$3.04

$2.75 – $3.35

Cash G&A ($MM)(1)

$13.1

$14.9 – $17.9

Production Taxes (% of oil, NGL and gas sales)

8.3 %

8.4% – 8.8%

E&P & Other CapEx ($MM)(2)

$208.8

$147 – $177

Cash Interest ($MM)(1)

$7.5

$7.0 – $8.0

Cash Tax (% of Adjusted EBITDA)(3)

3.6 %

0% – 10%

(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 $3.5MM of reimbursed capital.

(3)

Chord paid $17.2MM in cash taxes in 4Q23. Guidance based on $70/Bbl – $90/Bbl WTI.

During the three months ended December 31, 2023, net cash provided by operating activities was $543.3MM and net income was $301.6MM ($6.93/diluted share). Adjusted EBITDA was $480.9MM, Adjusted Free Cash Flow was $247.4MM and Adjusted Net Income was $228.0MM ($5.25/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.

Estimated Net Proved Reserves:

During 2023, the Company added 78.6 million barrels of oil equivalent (“MMBoe”) of net proved reserves as a result of successful drilling in the Williston Basin and 18.8 MMBoe from the purchase of reserves in place associated with the XTO bolt-on acquisition in June 2023. Chord’s estimated net proved reserves at December 31, 2023 were 636.2 MMBoe and consisted of 368.4 million barrels (“MMBbl”) of crude oil, 138.2 MMBbl of NGLs and 777.9 billion cubic feet (“Bcf”) of natural gas. The Company’s estimated net proved reserves and PV-10 do not include probable or possible reserves and were determined using the preceding 12-month unweighted arithmetic average of the first-day-of-the-month index prices for crude oil and natural gas, which were held constant throughout the life of the properties. For the year ended December 31, 2023, the unweighted arithmetic average first-day-of-the-month prices for the prior 12 months were $78.22 per Bbl for crude oil and $2.64 per MMBtu for natural gas. These prices were adjusted for quality, energy content, transportation fees and market differentials. The information in the following table does not give any effect to or reflect our commodity derivatives. Future operating costs, production taxes, plugging and abandonment costs and capital costs were based on current costs as of year end. The Company’s estimated net proved reserves and related PV-10 at December 31, 2023 were based on reports independently prepared by Netherland, Sewell & Associates, Inc., the Company’s independent reserve engineers.

The table below summarizes the Company’s estimated net proved reserves and related PV-10 at December 31, 2023:

Crude Oil (MMBbl)

NGLs (MMBbl)

Natural Gas (Bcf)

Net Estimated
Reserves (MMBoe)

PV-10(1)

(in millions)

Developed

241.4

105.7

640.2

453.8

$                6,572.4

Undeveloped

127.0

32.5

137.8

182.4

1,956.1

Total Proved

368.4

138.2

777.9

636.2

$                8,528.5

(1)

PV-10 is a non-GAAP financial measure and generally differs from Standardized Measure, the most directly comparable GAAP financial measure, because it does not include the effect of income taxes on discounted future net cash flows. We believe PV-10 is a useful measure for investors when evaluating the relative monetary significance of our oil and gas properties and as a basis for comparison of the relative size and value of our proved reserves to our peers without regard to income taxes, which can vary between individual companies for various and unique factors. The PV-10 does not purport to present the fair value of our proved oil, NGL and natural gas reserves.

2024 Outlook:

Chord constructed its 2024 program to focus on capital efficiency and maximizing cash flow generation with a low reinvestment rate. The 2024 reinvestment rate is expected to be approximately 50%. Chord expects to generate approximately $1.9B of Adjusted EBITDA and $875MM of Adjusted Free Cash Flow ($79/Bbl WTI and $2.50/MMBtu Henry Hub) in 2024. 

Highlights of the 2024 plan include:

E&P and other CapEx is expected to total approximately $905MM – $945MM. Approximately 80% of E&P and other CapEx is expected to be invested in drilling and completions;
Chord plans to TIL 103 – 113 gross operated wells (approximately two-thirds 3-mile laterals) in 2024 with an average working interest of approximately 75%. Chord plans to TIL 26 – 30 gross operated wells in 1Q24; and
1Q24 volumes were impacted by downtime and deferred activity in January resulting from winter storms in North Dakota. Inclusive of downtime impacts from the January winter storms, 1Q24 oil volumes are expected to be 95 MBopd – 98 MBopd. FY24 oil volumes are expected to be 97 – 101 MBopd, with volumes highest in the second-half of 2024. Midpoint FY24 oil volumes of 99 MBopd are unchanged from the soft guidance announced during our 3Q23 earnings call, despite January winter storms.

The following table presents select operational and financial guidance for 1Q24 and FY24:

Metric

1Q24 Guidance

FY24 Guidance

Oil volumes (MBopd)

95.0 – 98.0

97.0 – 101.0

NGL volumes (MBblpd)

33.0 – 34.0

34.0 – 35.0

Natural gas volumes (MMcfpd)

217.0 – 223.0

217.5 – 223.5

Total volumes (MBoepd)

164.2 – 169.2

167.3 – 173.3

Oil premium (discount) to WTI ($/Bbl)

$(2.30) – $(1.30)

$(1.75) – $0.00

NGL realization (% of WTI)

15% – 25%

15% – 25%

Residue gas realization (% of Henry Hub)

55% – 65%

45% – 55%

LOE ($/Boe)

$10.70 – $11.50

$10.60 – $11.40

Cash GPT ($/Boe)(1)

$2.80 – $3.40

$2.30 – $2.90

Cash G&A ($MM)(1)

$16.5 – $19.5

$63.0 – $73.0

Production Taxes (% of oil, NGL and gas sales)

8.4% – 8.8%

8.4% – 8.8%

E&P & Other CapEx ($MM)

$230 – $260

$905 – $945

Cash Interest ($MM)(1)

$7.0 – $8.0

$28.0 – $32.0

Cash Tax (% of Adjusted EBITDA)(2)

0% – 5%

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:

4Q23

3Q23

FY23

Production data:

Crude oil (MBopd)

106.2

101.4

99.8

NGLs (MBblpd)

38.1

36.0

35.7

Natural gas (MMcfpd)

236.5

231.7

227.3

Total production (MBoepd)

183.8

176.0

173.4

Percent crude oil

57.8 %

57.6 %

57.6 %

Average sales prices:

Crude oil, without realized derivatives ($/Bbl)

$       77.88

$       83.22

$       77.85

Differential to NYMEX WTI ($/Bbl)

(0.52)

0.69

0.07

Crude oil, with realized derivatives ($/Bbl)

72.72

76.45

70.92

Crude oil realized derivatives ($MM)

(50.5)

(63.1)

(252.7)

NGL, without realized derivatives ($/Bbl)

13.09

12.38

13.62

NGL, with realized derivatives ($/Bbl)

13.09

12.38

13.84

NGL realized derivatives ($MM)

2.9

Natural gas, without realized derivatives ($/Mcf)

1.06

1.11

1.43

Natural gas, with realized derivatives ($/Mcf)

1.06

1.11

1.35

Natural gas realized derivatives ($MM)

(6.8)

Selected financial data ($MM):

Revenues:

Crude oil revenues

$       761.2

$       776.0

$    2,836.0

NGL revenues

45.9

41.0

177.7

Natural gas revenues

23.0

23.6

118.7

Total oil, NGL and natural gas revenues

$       830.1

$       840.6

$    3,132.4

Cash flows:

Net cash provided by operating activities:

$       543.3

$       399.5

$    1,819.9

Non-GAAP financial measures(1):

Adjusted EBITDA

$       480.9

$       469.1

$    1,728.0

Adjusted Free Cash Flow(2)

247.4

207.4

758.7

Adjusted net income

228.0

220.2

801.1

Select operating expenses:

Lease operating expenses (“LOE”)

$       169.9

$       177.1

$       658.9

Gathering, processing and transportation expenses (“GPT”)

47.5

52.3

180.2

Production taxes

68.5

72.5

260.0

Depreciation, depletion and amortization

167.4

160.3

598.6

Total select operating expenses

$       453.3

$       462.2

$    1,697.7

Earnings per share:

Basic earnings per share

$          7.27

$          5.01

$       24.59

Diluted earnings per share

6.93

4.77

23.51

Adjusted diluted earnings per share (Non-GAAP)(1)

5.25

5.04

18.46

(1)

Non-GAAP financial measure. See “Non-GAAP Financial Measures” below for a reconciliation to the most directly comparable financial measures under GAAP.

(2)

4Q23 and FY23 Adjusted Free Cash Flow were reduced for by $3.5MM and $14.5MM, respectively, for reimbursed capital.

Capital Expenditures:

The following table presents the Company’s total capital expenditures (“CapEx”) by category for the period presented:

1Q23

2Q23

3Q23

4Q23(1)

FY23(1)

CapEx ($MM):

E&P

$           201.8

$           256.6

$           254.0

$           208.4

$           920.8

Other

0.5

0.4

0.1

0.5

1.5

Total E&P and other CapEx(1)

202.3

257.0

254.1

208.9

922.3

Capitalized interest

1.4

1.3

0.9

0.5

4.1

Acquisitions

361.6

361.6

Total CapEx

$           203.7

$           619.9

$           255.0

$           209.4

$        1,288.0

(1)

4Q23 and FY23 includes $3.5MM and $14.5MM of reimbursed capital, respectively.

Return of Capital:

Chord declared a base-plus-variable cash dividend of $3.25 per share of common stock, including a base dividend of $1.25 per share of common stock and a variable dividend of $2.00 per share of common stock. The dividends will be payable on March 19, 2024 to shareholders of record as of March 5, 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.

In addition, during 4Q23 the Company repurchased 510,471 shares of common stock at a weighted average price of $162.20 per share totaling $82.8MM. These share repurchases included $53.0MM attributable to 4Q23 return of capital and $29.8MM attributable to cash proceeds from warrants exercised.

Hedging Update:

The following table presents the Company’s hedge portfolio as of February 20, 2024:

1Q24

2Q24

3Q24

4Q24

FY24

FY25

FY26

NYMEX WTI

Swaps

Volume (Bopd)

1,000

1,000

1,000

1,000

1,000

Strike ($/Bbl)

$     69.27

$     69.27

$     69.27

$     69.27

$     69.27

$           —

$           —

Two-way collars

Volume (Bopd)

16,000

19,000

13,000

12,000

14,986

3,236

Floor ($/Bbl)

$     65.31

$     66.05

$     63.46

$     62.92

$     64.66

$     60.00

$           —

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