Q1/22 – Record print on volumes, CFPS in line. Q1/22 production volumes of 132,691 boe/d (74% liquids) came ahead of consensus of 130,858 boe/d (RBC: 131,715 boe/d). This drove funds flow of $505.7 million, mapping to CFPS of $0.80, which compared to consensus of $0.82 (RBC: $0.79). Capital spending of $212 million (RBC: $210 million) during the quarter included a drilling program peaking at 12 rigs with 71 (63.4 net) wells.
2022 outlook reiterated. Management maintained guidance for 2022 with the company planning to spend $510-530 million, drilling 186 (151 net) wells, with $85 million allocated to EOR and HSE initiatives. This is expected to drive production volumes of 130,000-132,000 boe/d (73% liquids), mapping to 17% in y/y growth (+12% per share). Given ongoing supply chain constraints and potential for inflationary pressure, we would not be surprised by tweaks to the H2/22 capital program through the balance of the year.
Return of capital update. Management did not provide any incremental return of capital updates following the recent dividend increase (note here) to $0.36/share and continued focus on share buybacks (note here). The company has outlined plans to allocate 50% of post dividend free cash flow to the balance sheet/acquisitions with the remaining on return of capital (dividends, share repurchases).
Board director nominee. Management announced that Ms. Chandra A. Henry, current CFO of Longbow Capital, will stand for election as an independent director at the upcoming Annual Meeting on May 18, 2022. Ms. Heather J. Culbert is retiring and will not be seeking re-election at the upcoming Annual Meeting.
Conference call details. Management will host a conference call to discuss results today at 11:00 am ET. 1-888-390-0605.