Endeavor Reports Strong First-Quarter 2021 Results
MIDLAND, Texas, May 13, 2021
Endeavor Energy Resources, L.P. (“Endeavor” or the “Company”) announces operating results for the quarter ended March 31, 2021.
First Quarter 2021 Highlights
- Averaged net production of 179.9 MBoe per day, a 2% increase compared to the three months ended March 31, 2020 (“1Q20”). Due to winter storms in the Permian Basin, 1Q21 production was negatively impacted by approximately 6 MBoe per day.
- Achieved Company record low drilling and completion cycle times, with the average number of days from spud to rig release decreasing by 8% to 13.3 days and with the average number of stages completed per day increasing by 4% to 14.2 stages per day, in each case as compared to 4Q20.
- Added three operated drilling rigs during 1Q21 and one frac crew during 2Q21.
- Capital efficiency continued to improve with Midland Basin well costs averaging less than $610 per lateral foot, despite 12% shorter average lateral length compared to 4Q20.
2021 Updated Outlook Highlights
- Added two operated drilling rigs in May 2021 for a total of eleven operated drilling rigs with plans to add an additional operated drilling rig during the third quarter of 2021. The Company now plans to exit 2021 with twelve operated drilling rigs.
- Increased capital investment rates from $1,400 – $1,550 million to $1,540 – $1,620 million for the full-year of 2021.
Operational Update
1Q21 total net production was 16.2 MMBoe, a 2% increase from 15.8 MMBoe in 1Q20. Average net daily production increased 2% to 179.9 MBoe per day (62% oil) during 1Q21 from 174.1 MBoe per day (68% oil) during 1Q20. 1Q21 production was impacted by approximately 6 MBoe per day due to severe winter weather in Texas during February 2021 that led to interruptions in third-party power supply and third-party gas gathering, causing production shut-ins. During 1Q21 the average realized price before the effects of hedges was $42.49 per Boe and the average realized price after the effects of hedges was $36.90 per Boe. Benchmark pricing for the quarter included NYMEX WTI at $57.84/Bbl and NYMEX Henry Hub at $2.71/MMBtu. The Company’s average realized price per Boe of $42.49 before the effects of hedges was up 30% compared to 1Q20.
Aggregate lease operating expenses totaled $97.3 million ($6.01/Boe) a 14% decrease from $113.3 million ($7.15/Boe) during 1Q20. Total general and administrative expense also decreased 24% to $14.3 million ($0.88/Boe) during 1Q21 from $18.8 million ($1.19) in 1Q20.
During 1Q21, Endeavor continued to see strong drilling and completions efficiency gains enabling the Company to spud 45 gross operated wells and place 26 gross operated wells on production. The Company’s working interest in operated wells placed on production during 1Q21 was approximately 96%, with an average completed lateral length of approximately 8,906 feet.
Capital Investment
Capital investment reflected continued efficiencies with costs maintained at approximately $610 per lateral foot. Total accrual-based capital expenditures during 1Q21 were $225.4 million. Approximately, $199.1 million of the Company’s capital investment was related to its DC&E of operated and non-operated wells, $9.1 million was related to leasehold additions and acquisitions, and $17.2 million was related to additions to other property and equipment including, surface land, water disposal and electrical facilities.
Full-Year 2021 Outlook
The table below summarizes the Company’s full year 2021 guidance (figures in millions, except per Boe amounts, PoPs and Spuds).
| FY’21 Guidance | |
| Total Production (MBoepd) | 177 – 190 |
| LOE per Boe, including workovers and ad valorem taxes | $6.05 – $6.30 |
| Capital Investment (accrual basis) | |
| Total DC&E investment | $1,350 – $1,450 |
| Total Capital investment | $1,540 – $1,620 |
| Operated PoPs | 165 – 185 |
| Operated Spuds | 240 – 260 |
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 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 revolving credit facility and borrowing base determinations under our 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 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; 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 5.500% senior unsecured notes due 2026 in the aggregate principal amount of $500 million 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 months ended March 31, 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.