Endeavor Energy Resources, LP Announces Fourth Quarter 2022 Operating Results, 2022 Full-Year Results, and 2023 Outlook
MIDLAND, Texas, March 23, 2023 — Endeavor Energy Resources, L.P. (“Endeavor” or the “Company”) announces financial and operating results for the three and twelve months ended December 31, 2022, and provides full-year 2023 outlook.
Fourth Quarter 2022 (“4Q22”) Highlights
▪ Average net production of 311.1 MBoe per day, a 26% increase compared to the three months ended December 31, 2021 (“4Q21”) and an 8% sequential growth compared to the three months ended September 30, 2022.
▪ Repurchased $22 million of the Company’s outstanding 2028 Senior Notes in a series of open market transactions.
Full-Year 2022 Highlights
▪ Averaged full-year net production of 278.8 MBoe per day, a 36% increase compared to the twelve months ended December 31, 2021 (“2021”)
▪ Reduced gross debt by 39% since year-end 2021 and 53% since year-end 2020.
▪ Year-end proved reserves increased by 19% vs. year-end 2021.
▪ Made significant progress on emission cutbacks with flaring intensity reduced by ~22% as compared to 2021.
Higher production and prices for crude oil contributed to higher earnings in 4Q22, as compared to 4Q21. Average net daily production increased to 311.1 MBoe per day (59% oil) during 4Q22, as compared to 246.6 Mboe per day (60% oil) during 4Q21. The Company’s 4Q22 average wellhead realized price per Boe of $57.89, before the effects of hedges, was up 4% compared to 4Q21.
Endeavor continued to deliver strong operational efficiency gains that enabled the Company to spud 333 and place on production (“PoPs”) 292 horizontal gross operated wells for the twelve months ended December 31, 2022 (“2022”), including 11 wells that had lateral lengths of approximately 15,000 feet. Endeavor’s working interest in operated wells placed on production during 4Q22 was approximately 97%.
Total accrual-based capital expenditures during 4Q22 were $779 million. Approximately, $704 million of the Company’s capital investment for 4Q22 was related to the drilling, completion and equipping (“DC&E”) of operated and non-operated wells, $20 million was related to leasehold and mineral additions and acquisitions, and $55 million was related to additions to other property and equipment, including surface land, water disposal and electrical facilities. Total operated 94 horizontal wells spudded and 73 horizontal wells placed on production in 4Q22.
For 2022, total capital expenditures on an accrual basis were $2,831 million. Approximately $2,512 million of the Company’s capital investment was related to its DC&E of operated and non-operated wells, $168 million was related to leasehold additions and acquisitions, and $151 million was related to additions to other property and equipment, including water disposal and electrical facilities.
Subsequent to 4Q22
On January 24, 2023, Damon Button retired as the Company’s Chief Financial Officer and as a member of the Board of Managers (the “Board”) of Endeavor Petroleum, LLC, the Company’s sole general partner. Effective January 24, 2023, the Board appointed Brenda R. Schroer as Chief Financial Officer of the Company to fill the vacancy left by Mr. Button’s retirement. Ms. Schroer was also appointed to the Board effective January 24, 2023.
Full-Year 2023 Outlook
The Company exited 2022 with 15 horizontal drilling rigs and 4 frac crews. For the twelve months ending December 31, 2023 (“2023”), the Company intends to maintain the same number of frac crews and horizontal drilling rigs.
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; economic and competitive conditions, including those resulting from the current conflict between Russia and Ukraine and elevated inflation levels resulting from global supply and demand imbalances and associated changes in monetary policy; supply chain disruptions; our liquidity and our ability to finance our development and exploration activities; 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,” “guidance” 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, guidance, or projections. The Company cautions you that assumptions, beliefs, expectations, intentions, guidance 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; our ability to successfully execute our growth strategies; the effects of government regulation, including the Inflation Reduction Act of 2022, permitting and other legal requirements, including, but not limited to, new legislation or regulation concerning hydraulic fracturing, the flaring or venting of natural gas, weather emergency preparedness or disposal of produced water; the length, scope, and severity of the ongoing coronavirus disease 2019 (“COVID-19”) pandemic, including the effects of related public health concerns and the impact of continued actions taken by governmental authorities and other third parties in response to the pandemic and its impact on commodity prices, supply and demand considerations, and storage capacity; 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 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 twelve months ended December 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.