Endeavor Energy Reports Exceptional Third-Quarter 2021 Results
MIDLAND, Texas, November 11, 2021—Endeavor Energy Resources, L.P. (“Endeavor” or the “Company”) announces operating results for the three and nine months ended September 30, 2021.
Third Quarter 2021 Highlights
Averaged record net production of 208.6 MBoe per day, a 24% increase compared to the three months ended September 30, 2020 (“3Q20”).
Increased full year 2021 production guidance to 195-199 MBoepd from 177-190 MBoepd previously announced while lowering total capital investment and lease operating cost guidance by 3% and 2%, respectively at midpoint.
Netherland, Sewell & Associates, Inc. (“NSAI”) completed their mid-year 2021 review of the Company’s reserves in August 2021. According to NSAI’s review, which incorporates only two years of drilling inventory, as of June 30, 2021, the PV-10 value of the Company’s proved reserves was $10.5 billion at SEC prices.
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.
Operational Update
Higher production and higher prices for crude oil, natural gas and natural gas liquids all contributed to higher earnings in 3Q21 as compared to the 3Q20. 3Q21 total net production was 19.2 MMBoe, a 24% increase from 15.4 MMBoe in 3Q20. Average net daily production increased 24% to 208.6 MBoe per day (60% oil) during 3Q21 as compared to 167.6 MBoe per day (61% oil) during 3Q20. During 3Q21, the Company’s average realized price before the effects of hedges for hydrocarbon production sold was $51.00 per Boe and the Company’s average realized price after the effects of hedges for hydrocarbon production sold was $42.44 per Boe. Benchmark pricing for 3Q21 included NYMEX WTI at $70.56/Bbl and NYMEX Henry Hub at $4.02/MMBtu.
The Company’s 3Q21 average realized price per Boe of $51.00, before the effects of hedges, was up 87% compared to 3Q20. The Company’s per unit lease operating expenses (“LOE”) declined by 10% during 3Q21 compared to 3Q20. Aggregate LOE in 3Q21 totaled $105.8 million ($5.51/Boe), a 12% increase from $94.1 million ($6.10/Boe) during 3Q20. The increase in aggregate LOE in 3Q21 from 3Q20 is directly attributable to a 24% increase in total production.
During 3Q21, Endeavor continued to see strong drilling and completions efficiency gains enabling the Company to spud 66 gross operated wells and place 55 gross operated wells on production. Endeavor’s working interest in operated wells placed on production during 3Q21 was approximately 97%, with an average completed lateral length of approximately 9,961’.
Capital Investment
Endeavor’s capital investment during 3Q21 reflected continued efficiencies, with well costs reduced to approximately $570 per lateral foot. Total accrual-based capital expenditures during 3Q21 were $435.8 million. Approximately, $365.2 million of the Company’s capital investment for 3Q21 was related to the drilling, completion and equipping (“DC&E”) of operated and non-operated wells, $29.9 million was related to leasehold additions and acquisitions, and $40.7 million was related to additions to other property and equipment including surface land, water disposal and electrical facilities.
Forward Looking Statements
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 the offering of our 2026 Notes and 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, 2020 and our Interim Report for the three and nine months ended September 30, 2021. 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.