Endeavor Reports Fourth Quarter, Full-Year Operating Results and 2021 Outlook
MIDLAND, Texas, March 25, 2021
Endeavor Energy Resources, L.P. (“Endeavor,” or the “Company”) announces operating results for the quarter and year ended December 31, 2020 and provides full year 2021 outlook.
Fourth Quarter 2020 Highlights
- Produced 184.0 MBoe per day (62% oil) for the three months ended December 31, 2020 (“4Q20”), a 20% increase as compared to the three months ended December 31, 2019 (“4Q19”) and a 10% increase from the three months ended September 30, 2020 (“3Q20”).
- Delivered strong cost control measures with a Company record low lease operating expense per Boe of $5.90 for 4Q20, a 27% decrease as compared to 4Q19.
- Reduced average drilling, completion and equipping (“DC&E”) cost per lateral foot by approximately 23% from 4Q19 and 10% from 3Q20 levels.
- Continued to improve cycle times across the Midland Basin. Improved average feet drilled per day by approximately 10%, and the number of frac stages completed per day improved by 19%, in each case as compared to 4Q19.
- Averaged full year net production of 170.6 MBoe per day, a 39% increase compared to twelve months ended December 31, 2019 (“2019”).
- Placed 138 gross operated horizontal wells on production during 2020 with individual well costs down approximately$1.3 million from average 2019 levels.
- Updated the Company’s total economic location count based on ongoing delineation and updated well cost assumptions. Substantial increase in economic location count from ~8,900 wells in 2019 to ~9,650 wells in 2020. Current economic location counts based on $55/Bbl WTI crude, $2.75/MMBtu Henry Hub gas, IRR hurdle of 10% and$6.2mm DC&E per well.
- Made significant progress on emission cutbacks with flaring intensity reduced by ~50% as compared to 2019.
2021 Outlook Highlights
- Endeavor expects the production impact from recent winter storms in the Permian Basin will affect production for the three months ending March 31, 2021 (“1Q21”) by approximately 8 MBoe/d and full year production by approximately 2MBoe/d. 2021 average production guidance of 177-190 MBoe/d is inclusive of estimated winter storm impacts.
- Added three operated horizontal drilling rigs during 1Q21 with current plans to exit 2021 with a total of eleven operated horizontal drilling rigs and four frac crews.
4Q20 total net production was 16.9 MMBoe, a 20% increase from 14.0 MMBoe in 4Q19. Total net production increased 10% from 15.4 MMBoe in 3Q20, driven primarily by an increase in completions activity. Average net daily production increased 39% to 170.6 MBoe per day (64% oil) during 2020 from 123.3 MBoe per day (72% oil) during 2019.
During 4Q20, Endeavor continued to see strong drilling and completions efficiency gains, enabling the Company to spud 30 gross operated horizontal wells and place 48 gross operated horizontal wells on production. Endeavor’s working interest in operated horizontal wells placed on production during 4Q20 was approximately 97%, with an average completed lateral length of approximately 10,008 feet and an average IP30 of 1,253 Boepd. As of December 31, 2020, the Company had 13 gross operated horizontal wells that were in the process of being drilled and 50 gross operated horizontal wells that were waiting to be completed or in various stages of completion operations.
Total capital expenditures on an accrual basis during 4Q20 were $233.4 million compared to $387.4 million for 4Q19. During 4Q20, approximately $211.2 million of the Company’s capital investment was related to its DC&E of operated and non-operated wells, $7.4 million was related to leasehold additions and acquisitions, and $14.8 million was related to additions to other property and equipment including, water disposal and electrical facilities. During 2020, the Company reduced its DC&E costs per foot to approximately $663 per foot, representing a 16% reduction from $791 per completed lateral foot during the full year 2019. Full-Year 2021 Outlook The Company exited 2020 with 5 horizontal drilling rigs running and 2 frac crews and plans to exit 2021 with 11 horizontal drilling rigs and four frac crews in 2021. The table below summarizes the Company’s 2020 actual results and Endeavor full year 2021 guidance (figures in millions, except per Boe amounts, PoPs and Spuds).
Full-Year 2021 Outlook
The Company exited 2020 with 5 horizontal drilling rigs running and 2 frac crews and plans to exit 2021 with 11 horizontal drilling rigs and four frac crews in 2021. The table below summarizes the Company’s 2020 actual results and Endeavor full year 2021 guidance (figures in millions, except per Boe amounts, PoPs and Spuds).
|2020 Actual Results||FY’21 Guidance|
|Total Production (MBoepd)||170.6||177-190|
|LOE per Boe, including workovers and ad valorem taxes||$ 6.33||$6.00-$6.25|
|Capital Investment (accrual basis)|
|Total DC&E investment||$ 834.2||$1,300-$1,400|
|Total Capital investment||$ 991.0||$1,400-$1,550|
|Operated HZ PoPs||138||165-185|
|Operated HZ Spuds||107||215-230|
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. 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.