John White

John White inquired about the decision to halt development drilling in the Marcellus for the year and requested an update on the performance of the first two wells in Alberta.

Answer

CEO Jason Stabell explained that it was too early to provide detailed performance data on the new Alberta wells, which began production and cash flow in early April. He assured that a more comprehensive update would be provided during the next quarterly report.

John White of ROTH Capital Partners asked for clarification on the net production from the recently activated Pennsylvania wells and whether improved Q4 gas pricing would bring curtailed volumes back online.

Answer

CEO Jason Stabell clarified that the net production from the three new wells is approximately 8 million cubic feet per day, based on the company's ~13% net revenue interest. He also confirmed that while daily visibility is limited, the company expects curtailed volumes to return as prices improve, anticipating the situation will fully resolve by the beginning of Q1 2025.

John White of ROTH Capital Partners inquired about W&T Offshore's drilling strategy, seeking confirmation of its focus on recompletions and workovers over new grassroots wells.

Answer

Chairman and CEO Tracy Krohn confirmed this is the current strategy. He cited excessive volatility in commodity prices, particularly for oil where the company remains unhedged, as the primary reason for avoiding the higher risk associated with new drilling projects.

John White of ROTH MKM inquired about W&T Offshore's 2025 production growth, asking if the increase is solely from restarting shut-in fields and workovers, given the absence of new drilling in the guidance.

Answer

Tracy Krohn, Chairman and CEO, confirmed the production growth guidance does not include new drilling. He explained that the company is evaluating attractive asset acquisition opportunities, which may cause them to defer drilling activities planned for late 2025 into 2026.

John White from ROTH MKM inquired about the current state of the acquisition market, asking for generalized comments on what W&T Offshore is observing.

Answer

Tracy Krohn, Chairman and CEO, explained that the M&A market is in flux as companies were awaiting the election outcome to better assess property valuations. He anticipates an uptick in acquisition activity in the first half of the coming year. Krohn also noted that drilling has been challenging due to regulatory hurdles, but expressed hope that the political environment might provide more clarity, which would be factored into the upcoming budget and drilling plans.

John White of ROTH Capital Partners asked for clarification on the Lucero asset profile, specifically questioning what percentage of the properties are operated and confirming his observation that the working interest in Lucero's acreage is significantly higher than legacy Vitesse assets.

Answer

President Brian Cree confirmed that 'basically 100%' of the Lucero assets are operated. He also affirmed that Lucero's average working interest is substantially higher, at approximately 75% to 80%, compared to Vitesse's legacy average of around 3%.

John White of ROTH Capital Partners asked whether volatile crude prices have put any planned 2025 wells from partners at risk of being rescheduled or canceled, potentially impacting guidance.

Answer

Executive Luke Brandenberg stated that for the ~60% of wells in the operated partnership program, Granite Ridge controls the decision and currently finds the economics attractive but will adapt if prices degrade. For the ~40% in the traditional non-op portfolio, he expressed confidence as many of these projects are already in process (spud or pad construction), making them difficult to stop.

John White requested more details on the ERCOT power initiative, asking about the status of current projects, the number of deals being pursued, and the potential timing for any new announcements.

Answer

CFO Philip Riley stated that the company is deeply focused on Phase 2 of its initial ERCOT project and is pleased with the market response. While they are exploring more opportunities given high power demand, they want to see progress on the current build-out before committing to more. He highlighted their first-mover advantage but noted that complex interconnection agreements take time, and more updates would be provided in the next quarterly report.

John White from ROTH Capital asked for more details on the Q4 infrastructure capital guidance, which ranges from $14 million to $21 million, and what it would be used for.

Answer

COO John Suter explained that the capital is for a large compressor station and associated gathering system in the Red Lake asset. He noted this investment is crucial for reliably moving gas from the 2025 development program to sales and provides future optionality for processing and markets, mirroring a successful strategy from their Champions asset.

John White of ROTH Capital Partners asked for the geographic source of the company's drilling and completion cost savings and inquired about plans for a well workover program on the New Mexico bolt-on acquisition.

Answer

COO John Suter responded that the cost savings are primarily being realized in their Texas 'champions play' and that they plan to apply these efficiencies to New Mexico. He confirmed an ongoing workover program in New Mexico, which includes the new assets, and highlighted additional value from connecting wells to the power grid.

John White from ROTH Capital Partners inquired whether Evolution's acquisition strategy is focused on existing core areas or if the company would consider opening a new core area.

Answer

CEO Kelly Loyd explained that the company is evaluating acquisitions in both existing and potentially new core areas. He highlighted that Evolution's non-operator model provides the flexibility to enter new regions without a significant increase in G&A expenses, as it doesn't require establishing a new operational field team.

John White of ROTH Capital Partners asked for an update on the company's capital expenditure outlook for the remainder of the fiscal year.

Answer

CFO Ryan Stash responded by reaffirming the company's existing full-year guidance. He stated that the previously announced range of $12 million to $14.5 million for total fiscal year 2025 CapEx remains a good estimate.

John White of ROTH Capital Partners asked for details on recent SCOOP/STACK drilling activity, including the dominant operators and the geological formations being targeted. He also sought confirmation on the timing for upcoming horizontal wells in the Chaveroo field.

Answer

CEO Kelly Loyd identified Canvas and Continental as the primary operators for the recent SCOOP/STACK wells. He confirmed the wells are horizontal and are targeting the Woodford and Mississippian formations, with a couple of Springer wells as well. Mr. Loyd also affirmed that the four new horizontal wells at Chaveroo are scheduled to begin in the second fiscal quarter of 2025, which corresponds to the fourth calendar quarter of 2024.

John White from ROTH Capital Partners was in the queue but stated that his questions had already been answered by previous exchanges.

Answer

As John White withdrew his question, no response was provided by management.

John White of ROTH Capital Partners sought clarification on whether Ring Energy's increased production guidance was accompanied by an increase in its capital expenditure budget for the year.

Answer

Paul McKinney, Chairman and CEO, confirmed that the CapEx budget has not been increased; rather, the guidance midpoint represents a slight reduction. He attributed this to lower costs in the oilfield services sector and internal efficiencies, which allow the company to drill and complete its planned wells for less than originally estimated. Alex Dyes, EVP of Engineering and Corporate Strategy, added that a presentation slide details the 3% reduction in the midpoint of the updated guidance.

John White asked about HighPeak's plans to offset its successful Kallus Middle Spraberry well, including the potential timing and direction of a follow-up well. He also noted the continued strong well results from the Wolfcamp A and Middle Spraberry formations as the company expands north and east in its Flat Top block.

Answer

President Michael Hollis responded that the company is extremely excited by the Kallus well results. Instead of a direct offset, he stated they would likely step out a few miles north, south, or east in the next one or two quarters to delineate a larger portion of their acreage. Hollis emphasized that the vast majority of their 300 identified Middle Spraberry locations are not yet included in their sub-$50 breakeven inventory, suggesting significant potential to grow this high-value inventory as they continue to de-risk the formation.

John White from Roth Capital Partners asked about the company's preference for capital return methods, such as stock buybacks versus dividends, in the event of a successful sale of the Bairoil property.

Answer

CEO Martyn Willsher explained that while the company is actively evaluating all options for Bairoil, including a sale, partial monetization, or retaining the asset, it would be inappropriate to speculate on a specific capital return plan. He confirmed that both dividends and stock buybacks are on the table for consideration by the Board at the appropriate time, funded either by a potential transaction or by future organic cash flow generation.

John White from Roth MKM inquired about the lower-than-estimated Lease Operating Expense (LOE) for the quarter and sought confirmation that the company's 2024 guidance remains unchanged from its January release.

Answer

CFO Gary W. Johnson and CEO Wolf E. Regener acknowledged that factors like reduced water haul costs contributed to lower OpEx but did not provide a specific reason for the variance from the analyst's model. They confirmed that the 2024 guidance is currently unchanged, pending the performance of new wells coming online.