Endeavor Energy Announces First Quarter 2022 Operating Results
MIDLAND, Texas, May 12, 2022—Endeavor Energy Resources, L.P. (“Endeavor” or the “Company”) announces operating results for the quarter ended March 31, 2022 (“1Q22”).
Record 1Q22 Company Highlights
▪ Averaged net production of 257.5 MBoe per day, a 43% increase compared to the three months ended March 31, 2021 (“1Q21”).
▪ Spudded and placed on production (“PoP”) 79 and 91 horizontal wells, respectively.
Other 1Q22 Highlights
▪ Successfully closed on certain Midland Basin leasehold, mineral and surface acquisitions totaling $60.8 million.
▪ Received credit ratings upgrades from Moody’s (Ba1) and S&P Global Ratings (BB+).
▪ Flaring intensity reduced by 50% versus 1Q21.
See “Supplemental Non-GAAP Financial Measures” below for descriptions of the above non-GAAP measures, as well as reconciliations of such measures to the associated GAAP (as defined herein) measures.
Higher production and higher prices for crude oil, natural gas, and natural gas liquids all contributed to higher earnings in 1Q22, as compared to 1Q21. 1Q22 total net production was 23.2 MMBoe, a 43% increase from 16.2 MMBoe in 1Q21. Average net daily production increased to 257.5 MBoe per day (61% oil) during 1Q22, as compared to 179.9 MBoe per day (62% oil) during 1Q21. During 1Q22, the Company’s average realized price before the effects of hedges for hydrocarbon production sold was $67.19 per Boe and the Company’s average realized price after the effects of hedges for hydrocarbon production sold was $60.11 per Boe. Benchmark pricing for 1Q22 included NYMEX WTI at $94.29Bbl and NYMEX Henry Hub FOM at $4.96/MMBtu. The Company’s 1Q22 average realized price per Boe of $67.19, before the effects of hedges, was up 58% compared to 1Q21.
The Company’s per unit lease operating expenses (“LOE”) declined by 4% during 1Q22 compared to 1Q21. Aggregate LOE in 1Q22 totaled $134.0 million ($5.78/Boe), a 38% increase from $97.3 million ($6.01/Boe) during 1Q21. The increase in aggregate LOE in 1Q22 from 1Q21 is directly attributable to a 43% increase in total production.
During 1Q22, Endeavor continued to see strong drilling and completions efficiency gains enabling the Company to spud 79 and PoP 91 gross operated wells. Endeavor’s working interest in operated wells placed on production during 1Q22 was approximately 97%, with an average completed lateral length of approximately 10,059.
Endeavor’s capital investment during 1Q22 reflected continued efficiencies which are partially offsetting the impact from inflation, with well costs totaling approximately $668 per lateral foot. Total accrual-based capital expenditures during 1Q22 were $641.3 million. Approximately, $537.4 million of the Company’s capital investment for 1Q22 was related to the drilling, completion and equipping (“DC&E”) of operated and non-operated wells, $72.3 million was related to leasehold and mineral additions and acquisitions, and $31.6 million was related to additions to other property and equipment, including surface land, water disposal, and electrical facilities.
Full-Year 2022 Outlook
The Company is currently operating 14 horizontal drilling rigs and 4 frac crews. During the twelve months ending December 31, 2022 (“2022”), the Company intends to maintain the existing number of frac crews and one additional horizontal drilling rig.
This release contains certain statements and information concerning Endeavor’s expectations, estimates, beliefs, plans, projections, objectives, goals, and strategies that are not historical facts. These statements are “forward-looking statements” and may include, among others, statements regarding: our growth strategies; our ability to explore for and develop oil and natural gas resources successfully and economically; our estimates of the timing and number of wells Endeavor expects to drill and other development and exploration activities; our estimates regarding timing and levels of production; anticipated trends in our business; the effects of competition on us; our future results of operations; our liquidity and our ability to finance our development and exploration activities; amendments to our senior secured revolving credit facility and borrowing base determinations under our senior secured revolving credit facility; our capital expenditure plan; future market conditions in the oil and natural gas industry; our ability to make and integrate acquisitions; and the effect of governmental regulation. You generally can identify our forward-looking statements by the words “anticipate,” “believe,” “budgeted,” “continue,” “could,” “estimate,” “expect,” “forecast,” “foresee,” “goal,” “intend,” “may,” “objective,” “plan,” “potential,” “predict,” “projection,” “scheduled,” “should,” “would” and other words that convey the uncertainty of future events or outcomes. Forward-looking statements are not guarantees of performance. The Company has based forward-looking statements in this release on our current expectations and beliefs about future developments and their potential effect on us. While our management considers forward-looking statements contained in this release to be reasonable as and when made, there can be no assurance that future developments affecting us will be those that the Company anticipates. Forward-looking statements contained in this release are inherently subject to significant business, economic, competitive, regulatory, and other risks and uncertainties (some of which are beyond our control) and assumptions that could cause actual results to differ materially from our historical experience and present expectations or projections. The Company cautions you that assumptions, beliefs, expectations, intentions, and projections about future events may and often do vary materially from actual results. Therefore, the Company cannot assure you that actual results will not differ materially from those expressed or implied by our forward-looking statements. Known material factors that could cause actual results to differ from those expressed in or implied by forward-looking statements contained in this release include, but are not limited to: declines in the prices the Company receives for our oil and natural gas; uncertainties about the estimated quantities of oil and natural gas reserves; drilling and operating risks, including risks related to properties where the Company does not serve as the operator; the adequacy of our capital resources and liquidity, including, but not limited to, access to additional borrowing capacity under our senior secured revolving credit facility; the effects of government regulation, permitting and other legal requirements, including, but not limited to, new legislation or regulation of hydraulic fracturing or the flaring or venting of natural gas; difficult and adverse conditions in the domestic and global capital and credit markets; the concentration of our operations in the Permian Basin; potential financial losses or earnings reductions resulting from our commodity price risk management program or any inability to manage our commodity price risks; shortages of oilfield equipment, supplies, services and qualified personnel and increased costs for such equipment, supplies, services and personnel; risks and liabilities associated with acquired properties, including, but not limited to, the assets acquired in connection with each of our recent acquisitions; uncertainties about our ability to replace reserves and economically develop our current reserves; competition in the oil and natural gas industry; and our substantial existing indebtedness. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements found in our Offering Circular, dated June 2, 2020, circulated in connection with the offering of our 6.625% senior unsecured notes due 2025 in the aggregate principal amount of $600 million; our Offering Circular, dated November 28, 2017, circulated in connection with our 5.750% senior unsecured initial notes due 2028 in the aggregate principal amount of $500 million; our Offering Circular, dated November 12, 2019, circulated in connection with the tack-on offering of our 5.750% senior unsecured notes due 2028 in the aggregate principal amount of $500 million; and, those risk factors and other cautionary statements found in our Annual Report for the year ended December 31, 2021 and our Interim Report for the three months ended March 31, 2022. All written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statement above. You should not place undue reliance on forward-looking statements. Each forward-looking statement speaks only as of the date of the particular statement, and, except as required by law, the Company undertakes no duty to update or revise any forward-looking statement. References in this paragraph to “our,” “us,” and “we” refer to Endeavor and its consolidated subsidiaries.