Question · Q1 2019
Craig Gilbert inquired about the company's free cash flow expectations for the remainder of the year and requested an update on capital spending plans. He also asked how potential acreage acquisitions would be funded and whether they would involve additional draws on the revolving credit facility.
Answer
Executive Larry Pinkston explained that the company budgets to spend within its anticipated cash flow, so it does not plan to have a higher revolver balance at year-end compared to the beginning of the year. He clarified that all available cash flow, including interest and G&A, is reinvested for growth, such as drilling and adding new rigs. While the revolver might be used for timing differences during the year, it is not intended for funding the base budget. Larger acquisitions would require using the credit line, which would then be paid down by slowing drilling operations. He confirmed the expectation is to repay the $40 million drawn on the revolver during the year.