Chord Energy Corporation · NASDAQ:CHRD
Chord Energy — Q2 2023 Earnings Presentation
19 slides from Chord Energy's earnings presentation, Aug 3, 2023
Slide 1: Delivering Value over the Next Decade
August 2, 2023 Delivering Value over the Next Decade
Slide 2: Important Disclosures
Important Disclosures Forward-Looking Statements This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical
Slide 3: Who is Chord: Premier Williston Basin Company
Who is Chord: Premier Williston Basin Company High Quality • Largest acreage position in Williston Basin 1,028K 94% 73% • 2Q23 Production: 169.0 MBoepd / 96.4MBopd Williston Basin Asset • Inventory: ~10 years at 2023 pace1 Net Acres Operated4 Working Interest4 Disciplined Capital • 2H23 reinvestment
Slide 4: Compelling Investment Opportunity
Compelling Investment Opportunity EBITDA Multiple1 Highlights • Asset continues to outperform expectations 5.0 4.7 • Better performance with wider spacing 4.1 2023E EV/EBITDA 4.0 • Extensive analogs across basin improve predictability • Minimal parent / child interference in development program 3.0
Slide 5: Chord's Return of Capital Program
Chord’s Return of Capital Program TTM Return of Capital (“RoC”)1 Annualized Shareholder Return Yield2 $2,000 ($873) $1,321MM 20% $1,818 18% Returned to 17% Shareholders % of Enterprise Value $1,500 $553 Merger & Special 10% $MM $945 Dividends 10% $1,000 $198 Buybacks 6% $375MM XTO $500 $570 bolt-on
Slide 6: 2023 Development Plan Generates Significant FCF
2023 Development Plan Generates Significant FCF North Significant Cash Generation Wildrose Cottonwood 2023E EBITDA - $1.7B1 South Cottonwood Cassandra Red Bank Alger Target Painted Hebron Sanish Woods $850MM - $880MM $735MM 2023E FCF1,2 Indian Hills 2023E CapEx3 Return of Capital / Debt Wild Basin I
Slide 7: Chord Development Evolution
Chord Development Evolution Highlights Former Current CHRD Wild CHRD Wild CHRD Painted • 2015 vintage Basin Basin Woods • Completed 10-14 wells across 100 feet of vertical section 14 wells 6 wells 4 wells 2015 Current Current • Conclusion: Well density suboptimal Middle Bakken • Current development
Slide 8: Deep Inventory Supports Sustainable Free Cash Flow
Deep Inventory Supports Sustainable Free Cash Flow Decade of Low-Cost Inventory1 Inventory by Breakeven WTI Price1 • 1,085 locations economic sub $60/Bbl breakeven 1,600 • Minimum 20% IRR fully loaded with G&A 1,374 1,400 Gross Operated Locations • 10k foot equivalent locations • XTO acquisition add
Slide 9: 3-Mile Laterals Improving Returns
3-Mile Laterals Improving Returns Longer Laterals Increase EUR1 CHRD Indian Hills 3-Mile2 Improving Drilling Time3 18 17 600 Days - Spud to RR (3-mile) 250 Cumulative Oil Per Well (MBo) 16 14.2 Basin Avg. 15.2 Cumulative Oil (Bbls) 500 14 ~43% 200 ~36% 12 11.6 400 uplift uplift 150 10 300 ~65% 8 100
Slide 10: Three Mile Laterals – Strong Contribution from 3rd Mile
Three Mile Laterals – Strong Contribution from 3rd Mile Test Using Tracer Data – Foreman Butte1 Tracer Testing Week Tracer Testing – Phase I • Test results show strong contribution 1 2 3 4 5 6 7 8 9 10 11 12 from 3rd mile after effective cleanout Heel • Production contribution from all stages post c
Slide 11: Continued Progress Drives Returns Even Higher
Continued Progress Drives Returns Even Higher Conservative Well Spacing1 Strong Well Performance2 1,100 100 300 Cumulative Oil Per Well (MBo) Oil Rate Per Well (MBopd) 250 >40% 900 80 uplift 200 Well Count 700 150 60 500 Downtime related to 100 ~50pt IRR Uplift weather/power issues 40 300 50 0 100 2
Slide 12: Chord ESG Focus Areas
Chord ESG Focus Areas Taking a comprehensive approach to identifying the range of ESG priorities for Chord Energy and managing the risks and opportunities Emissions Reductions Workforce Health and Safety Reduce Scope 1 emissions by improved gas capture, Maintaining the safety of employees, contracto
Slide 13: Chord Energy = Premier FCF Focused E&P
Chord Energy = Premier FCF Focused E&P Premier Williston Operator Significant and Resilient Capital Returns Program to with Top Tier Assets Free Cash Flow Generation Deliver Significant Value Enhances size and scale with high quality TTM Adjusted FCF1,2 of $945MM with a Peer leading return of capita
Slide 14: Appendix
SS SSS SSS LSS Appendix
Slide 15: Compelling Valuation and Returns Profile
Compelling Valuation and Returns Profile Free Cash Flow Outlook1,2 2023E Leverage3 Enterprise Value vs. PV-104 0.9 $16 $900 14% 0.8 $14.5B 12% 0.8 $14 $800 11% 12% 0.7 2023E Net Debt/EBITDA $700 $12 10% Free Cash Flow ($MM) 10% 0.6 $11.5B $600 FCF Yield (EV) $10 $9.4B $ Billions $500 8% 0.5 $8 $400
Slide 16: Return of Capital
Return of Capital Aim for peer-leading return of capital 2Q23 Return of Capital 1 ($MM, except per share) — Below 0.5x leverage: 75%+ of FCF — Below 1.0x leverage: 50%+ of FCF $116 2Q23 Adjusted Free Cash Flow2,3 — >1.0x leverage: Base dividend+ ($5.00/sh annual) x 75% Target 75%+ at Current Leverag
Slide 17: 2023 Guidance
2023 Guidance Highlights Guidance Ranges • Implied FY23 metrics at midpoint run at $75 WTI / $2.75 HH 3Q23 FY23 • Adjusted EBITDA: $1.7B • Adjusted FCF1: $735MM Oil Volumes (MBopd) 95.5 - 98.5 97.0 - 99.0 Gas Volumes (MMcfpd) 222.0 - 228.0 222.0 - 225.0 • FY23 CapEx guidance2: $850MM-$880MM NGL Volu
Slide 18: Chord Financial and Operational Results
Chord Financial and Operational Results Financial Highlights ($MM) Q3 2022 Q4 2022 Q1 2023 Q2 2023 Key Operating Statistics Q3 2022 Q4 2022 Q1 2023 Q2 2023 Oil Revenues $824.3 $738.0 $650.9 $647.9 Oil Production (MBopd) 96.2 95.8 95.1 96.4 NGL Revenues 106.2 78.1 62.2 28.5 NGL Production (MBoepd) 38
Slide 19: Chord Energy Hedge Book
Chord Energy Hedge Book Oil and Natural Gas Hedge Book 3Q23 4Q23 FY24 FY25 NYMEX WTI Swap volume (MBopd) 14.0 14.0 Weighted avg. swap price $50.00 $50.00 Collar volume (MBopd) – pre-2023 14.0 12.0 Weighted avg. ceiling price $65.43 $64.88 Weighted avg. floor price $45.71 $45.00 Collar volume (MBopd)