Chord Energy (CHRD) Q2 2024 earnings summary

Executive summary

• Delivered strong Q2 2024 results with oil volumes at the high end of guidance, driven by robust well performance and reduced downtime, and completed the Enerplus acquisition, expanding Williston Basin operations and increasing scale.

• Enerplus integration is progressing well, with annual synergy targets raised to over $200 million, up from the original $150 million estimate.

• Williston Basin highlighted as a premier oil play with high margins, strong returns, and improved differentials, maintaining a high oil cut and low breakeven inventory.

• Focus remains on efficient, sustainable free cash generation, peer-leading return of capital, and strong ESG performance with significant emissions reductions since 2019.

• Paid $2.52/share dividend in Q2 2024, with $197 million returned to shareholders and $61.7 million in share repurchases.

Financial highlights

• Q2 2024 adjusted free cash flow was $263 million on a pro forma basis, with adjusted EBITDA of $733 million and total revenues of $1.26 billion.

• Oil volumes exceeded midpoint guidance by about 1%, with total volumes up 2% to 207.2 MBoepd; Q2 2024 oil, NGL, and gas revenue was $1,169 million.

• Lease operating expense was $9.37/BOE in Q2 2024, below expectations; cash G&A (excluding merger costs) was $21.8 million.

• Net income for Q2 2024 was $213.4 million, with basic EPS of $4.36 and diluted EPS of $4.25.

• Liquidity at June 30, 2024, was $1.1 billion, with $575 million drawn on a $1.5 billion credit facility and net leverage at 0.3x.

Outlook and guidance

• Full-year oil volume guidance raised by 0.5 MBopd due to strong performance; FY24 oil production guidance is 150.9–153.5 MBopd.

• FY24 CapEx guidance is $1,455–$1,525 million; LOE guidance is $9.33–$9.97/boe; cash G&A: $116.3–$122.3 million.

• Cash taxes in 2H24 expected at 6%-12% of adjusted EBITDA, trending below original expectations.

• Frac crew count reduced to 1 for mid-year, to be increased later; non-op spending to rise in H2 2024.

• Adequate liquidity to fund capital expenditures and obligations for the next 12 months and foreseeable future.