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Chord Energy Corp (CHRD)·Q4 2024 Earnings Summary

Executive Summary

  • 4Q24 delivered solid operations and cash generation: oil volumes were above midpoint (153.3 MBopd), total volumes exceeded the high end (273.5 MBoepd), LOE came in below midpoint ($9.60/boe), and Adjusted FCF was $276.9MM as cost control and stronger NGL/gas realizations helped offset lower oil prices .
  • Capital returns accelerated: Chord returned 100% of 4Q24 Adjusted FCF with $205MM in buybacks (repurchased 1.60MM shares at $127.82) and raised the base dividend 4% to $1.30 per share; since the Enerplus close, >5% of shares have been repurchased through Feb 21, 2025 .
  • 2025 outlook reaffirmed: midpoint CapEx of ~$1.4B to deliver ~152.5 MBopd oil, with ~$2.5B Adjusted EBITDA and ~$860MM Adjusted FCF at $70 WTI/$3.50 HH; 1Q25 volumes tempered to 149.5–152.5 MBopd due to severe winter weather, with sequential growth into 2Q/3Q .
  • Operational catalysts: continued shift to longer laterals (40% 3-mile TILs planned in 2025; first 4-mile drilled and frac’d successfully), ongoing synergy capture, and efficiency improvements (simul-frac, faster cycle times) underpin capital efficiency and per-share growth focus via buybacks .
  • Estimate context: Wall Street consensus from S&P Global was unavailable due to API limits at run-time; results vs estimates are not shown. Values would normally be anchored to S&P Global consensus.

What Went Well and What Went Wrong

What Went Well

  • Volumes and cash margins: Oil volumes beat midpoint; total volumes topped guidance; LOE/boe below midpoint, driving $276.9MM Adjusted FCF (ex-reimbursed CapEx $282.1MM) .
  • Buyback-led capital returns: Returned 100% of Adjusted FCF in 4Q, with $205MM buybacks after the increased base dividend; >5% of shares repurchased since Enerplus close .
  • Strategic execution and capital efficiency: CEO highlighted “significant synergy capture,” longer laterals, and conservative spacing that have lowered breakevens and extended inventory life. “We expect share repurchases to comprise a significant portion of future shareholder returns” .
  • Management quote: “Fourth quarter performance was the latest in a series of strong quarters… robust shareholder returns… base dividend increased by 4% to $1.30 per share” .

What Went Wrong

  • Oil price headwind QoQ: Oil price realized fell to $68.79/bbl from $73.51/bbl in 3Q, pressuring revenue despite strong volumes .
  • Elevated G&A/merger costs: GAAP G&A was $45.7MM in 4Q (includes $9.0MM merger costs), though Cash G&A was $31.2MM with further synergy tailwinds expected in 2025 .
  • 1Q25 near‑term weather impact and differentials: Management cut 1Q25 oil volume outlook to 149.5–152.5 MBopd due to extreme cold; CFO flagged wider near‑term oil differentials that should improve gradually through 2025 .

Financial Results

P&L and Cash Flow vs prior quarters

MetricQ2 2024Q3 2024Q4 2024
Total oil, NGL & gas revenues ($MM)$902.7 $1,121.0 $1,064.3
Net income ($MM)$213.4 $225.3 $210.6
Diluted EPS ($)$4.25 $3.59 $3.43
Adjusted diluted EPS ($)$4.69 $3.40 $3.49
Adjusted EBITDA ($MM)$567.9 $674.5 $640.1
Adjusted Free Cash Flow ($MM)$216.1 $312.5 $276.9
Net cash from operating activities ($MM)$460.9 $663.2 $566.5

4Q24 YoY

Metric4Q234Q24
Total revenues ($MM)$964.7 $1,454.7
Oil, NGL & gas revenues ($MM)$830.2 $1,064.3
Net income ($MM)$301.6 $210.6
Diluted EPS ($)$6.93 $3.43

Operating & Cost KPIs (chronological order)

KPIQ2 2024Q3 2024Q4 2024
Oil volumes (MBopd)118.1 158.8 153.3
Total volumes (MBoepd)207.2 280.8 273.5
LOE ($/Boe)$9.37 $9.56 $9.60
Oil differential to WTI ($/bbl)$(1.71) $(1.51) $(1.49)
Cash G&A ($MM)$21.8 $27.9 $31.2
Cash GPT ($/Boe)—$2.91 $2.86
Production taxes (% of commodity sales)—9.0% 8.4%
E&P & other CapEx ($MM)$314.3 $329.2 $330.3
Cash Interest ($MM)$12.0 $19.8 $17.6

4Q24 Actual vs Guidance

Metric4Q24 Guidance4Q24 ActualOutcome
Oil volumes (MBopd)149.5–154.5 153.3 Above midpoint
Total volumes (MBoepd)261.5–270.1 273.5 Above high end
E&P & other CapEx ($MM)$315–$355 $330.3 Within, below midpoint
LOE ($/Boe)$9.25–$10.25 $9.60 Within
Oil discount ($/bbl)$(2.00)–$0.00 $(1.49) Favorable vs midpoint
NGL realization (% WTI)5%–15% 14% High end
Gas realization (% HH)25%–35% 43% Above
Cash GPT ($/Boe)$2.60–$3.20 $2.86 Within
Cash G&A ($MM)$29–$31 $31.2 Slightly above
Production taxes (% sales)8.7%–9.1% 8.4% Below

Note: Wall Street consensus (S&P Global) was unavailable at run-time; estimate comparisons are not shown.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Oil volumes (MBopd)FY25152–153 (3-year outlook issued 11/6/24) 150.3–154.8 Maintained (range consistent)
E&P & other CapEx ($B)FY25~$1.4 (3-year outlook) $1.34–$1.46 (midpoint $1.4) Maintained
Oil volumes (MBopd)1Q25—149.5–152.5 (weather impact) New (reflects storms)
LOE ($/Boe)FY25—$9.40–$10.40 New detail
Cash G&A ($MM)FY25—$97–$107 New detail
Cash GPT ($/Boe)FY25—$2.65–$3.15 New detail
Production taxes (% sales)FY25—8.4%–8.8% New detail
Cash interest ($MM)FY25—$51–$59 New detail
Cash tax (% of Adj. EBITDA)FY25—3%–10% New detail
Base dividend ($/sh)4Q24 declaration$1.25 base (3Q24) $1.30 base Raised

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 & Q3 2024)Current Period (Q4 2024)Trend
Capital efficiency, longer lateralsEmphasis on wider spacing and extending laterals; synergies >$200MM; 3-year plan to hold oil at ~$1.4B CapEx (Q2/3) First 4-mile lateral drilled/frac’d successfully; 40% of 2025 TILs are 3-mile; aim to lift >80% 3-mile+ over time Improving
Shareholder returns tilt to buybacksIncreased repurchases in 3Q; new $750MM program; variable dividend paid (Q3) 100% of 4Q FCF to buybacks; management open to balance sheet use if compelling More buyback-heavy
Enerplus integration/synergiesIntegration ongoing; >$200MM annual synergies target (raised) (Q2) Further synergy realization supports lower G&A and strong cash margins Continuing
NGL/gas realizations & seasonalityAdjusting realizations in guidance (Q3) Gas realizations stronger (43% of HH) on winter benchmark strength; expect seasonal pattern (weaker 2Q/3Q, stronger 1Q/4Q) Seasonal tailwinds near-term
Midstream/GPT costs—Competitive Bakken midstream landscape may aid GPT cost outcomes over time Potential tailwind
Non-op MarcellusRamping activity with gas price; not core; optionality 2025 non-op Marcellus 130–140 MMcfpd; monetization remains an option Optionality maintained
Macro/tariffs—Tariffs would likely modestly benefit domestic barrels; broader effects uncertain Watch item

Management Commentary

  • Strategy and positioning: “Chord has become a basin leader… capable of generating flat to slight volume growth with low maintenance capital… and robust free cash flow… We expect share repurchases to comprise a significant portion of future shareholder returns” .
  • 2025 plan: “Run a maintenance capital program… 5 rigs moving to 4 midyear… 130–150 gross TILs in 2025… ~40% 3-mile laterals… 22–32 TILs in 1Q25” .
  • Operations: “Successfully drilled and completed our first 4-mile lateral… frac job went beautifully… planning several more in 2025” .
  • Cash margins and realizations: “NGL realizations were 14% of WTI… gas realizations at 43% of Henry Hub… strength driven largely by cold weather; expect seasonality” .

Q&A Highlights

  • Capital/CapEx sensitivity: Downward pressure on the $1.4B plan could come from efficiency gains and stronger well performance; simul-frac efficiencies are “baked in” for the full frac crew .
  • Buybacks and balance sheet: Management would consider using the balance sheet to go above 100% FCF returns if capital allocation merits it at current valuation .
  • Longer laterals: 3-mile wells converge to 2-mile EUR/ft by ~6 months and fully by ~1 year; first 4-mile went “without a hitch” with record cycle times; more planned in 2025 .
  • Midstream costs: Competitive Bakken midstream could create opportunities to improve GPT/netbacks as contracts roll or via win‑win renegotiations .
  • Marcellus non-op: Expect ~130–140 MMcfpd in 2025; asset not core and monetization remains under consideration to maximize shareholder value .

Estimates Context

  • S&P Global consensus for quarterly EPS and revenue could not be retrieved at run-time due to API limits; therefore, this recap benchmarks results vs company guidance and prior periods rather than Wall Street estimates. We otherwise default to S&P Global for consensus when available.

Key Takeaways for Investors

  • Operational beat with margin support: Volume outperformance, favorable NGL/gas realizations, and disciplined LOE drove healthy 4Q FCF despite lower oil prices QoQ .
  • Buyback engine on: 100% FCF return and raised base dividend signal confidence; expect repurchases to remain a primary return lever given valuation and low leverage .
  • Capital efficiency tailwinds: Longer laterals (3- and 4-mile), simul-frac, and synergy capture point to potential CapEx underspend vs plan and stronger FCF over time .
  • Near-term watch items: 1Q volume headwind from severe weather and slightly wider oil diffs, with sequential improvement expected into 2Q/3Q .
  • 2025 reaffirmed: ~$1.4B CapEx holding oil flat near 152–153 MBopd; ~$2.5B Adj. EBITDA and ~$860MM Adj. FCF at base-case price deck .
  • Optionality: Competitive midstream landscape offers GPT cost opportunities; non-core Marcellus could be a monetization lever to fund accretive buybacks .
  • Risk balance: Commodity sensitivity (oil diffs, NGL/gas seasonality), integration/G&A synergy execution, and weather remain key variables .