Chord Energy Corporation · NASDAQ:CHRD
Chord Energy — Q4 2022 Earnings Presentation
19 slides from Chord Energy's earnings presentation, Feb 22, 2023
Slide 1: Delivering Value over the Next Decade
February 22, 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: Premier Williston Basin Company
Premier Williston Basin Company High Quality • Largest acreage position in Williston Basin 963K 94% 73% • 4Q22 Production: 171MBoepd / 96MBopd Williston Basin Asset • Inventory: ~10 years at 2023 pace1 Net Acres Operated3 Working Interest3 Disciplined Capital • Reinvestment rate: ~50%2 • 2023 estima
Slide 4: Compelling Investment Opportunity
Compelling Investment Opportunity 2023 EBITDA Multiple1 Highlights 3.2 • Asset continues to outperform expectations 3.0 2023E EV/EBITDA 3.0 • Better performance with wider spacing 2.8 2.7 • Extensive analogs across basin improve predictability 2.6 • Minimal parent / child interference in development
Slide 5: Chord's Return of Capital Program
Chord’s Return of Capital Program Peer Leading PF22 Return of Capital (“RoC”)1 Shareholder Return Yield2 $2,500 ($756) 30% 28.3% $2,067 % of Enterprise Value $2,000 $1,222MM Returned to Shareholders 19.2% 18.5% $1,500 20% $1,311 $MM $152 Buybacks 13.0% $245 $1,000 Merger Dividends 10% $824 6.3% $500
Slide 6: 2023 Development Plan Generates Significant FCF
2023 Development Plan Generates Significant FCF North Significant Cash Generation Wildrose Cottonwood 2023E EBITDA - $1.75B1 South Cottonwood Cassandra Red Bank Alger Target Painted Hebron Sanish Woods $825MM1 - 2023E FCF Investment in the Business Indian Hills Return of Capital / Debt $825-865MM -
Slide 7: 2023 Plan Detail
2023 Plan Detail FY23 Production Estimate 2023 Production Trajectory and TIL Timing Frac Protect Impact on Plan ~99 MBopd excluding 1.0 Mbopd 94.5 – 98.5 MBopd 110 weather & unexpected 50 6.0 unexpected frac protect frac protect 165.5 – 172.0 MBoepd Net Oil Frac Protect Downtime (MBopd) 100 40 5
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 1,200 1,085 1,000 Nor
Slide 9: 3-Mile Laterals Improving Returns
3-Mile Laterals Improving Returns Longer Laterals Increase EUR1 CHRD Indian Hills 3-Mile2 120 Cumulative Oil Per Well 600 Cumulative Oil Per Well 100 500 ~49% uplift ~43% uplift 80 400 (MBo) (MBo) 300 60 200 40 100 20 0 0 0 10 20 30 40 50 0 20 40 60 80 100 Producing Months Producing Days NORMAL LONG
Slide 10: Continued Progress Drives Returns Even Higher
Continued Progress Drives Returns Even Higher Conservative Well Spacing1 Strong Well Performance2 Peer-Leading Drilling Time3 1,100 120 300 Oil Rate Per Well (MBopd) Cumulative Oil Per Well (MBbo) 100 CHRD 14.2 250 900 >35% uplift 80 Well Count 200 700 E&P A 17 150 60 100 500 E&P B 40 18.3 ~50pt IRR
Slide 11: 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 12: 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 ~$1.3B of FCF1 in 2022 with a combined Peer leading return of capi
Slide 13: Appendix
Appendix
Slide 14: Merger Integration – Synergies on Track
Merger Integration – Synergies on Track Expect to Exceed Announced Synergy Estimates Cash G&A – Improved Cost Structure2 $120 Synergies increased from $65MM to $100MM+: $103 -34% $100 G&A (~$35MM of savings) $80 $68 • Efficient team structures, flatter organization $MM $60 • Increased span of contro
Slide 15: Compelling Valuation and Returns Profile
Compelling Valuation and Returns Profile Free Cash Flow Outlook1,2 2023E Leverage3 Enterprise Value vs. PV-104 $1,200 25% 0.5 $16 20% $14 $1,000 0.4 0.4 $14.5B 20% $12 Free Cash Flow ($MM) 17% 2023E Net Debt/EBITDA $800 0.3 FCF Yield (EV) 14% $10 $ Billions 15% $9.4B $600 0.2 $8 Peer avg. FCF yield
Slide 16: Return of Capital – 4Q22 Example
Return of Capital – 4Q22 Example Aim for peer-leading return of capital 4Q22 Return of Capital — Below 0.5x leverage: 75%+ of FCF $304 4Q22 Free Cash Flow1 — Below 1.0x leverage: 50%+ of FCF x 75% Target 75%+ at Current Leverage — >1.0x leverage: Base dividend+ ($5.00/sh annual) = $227 Target Return
Slide 17: 2023 Guidance for Chord Energy
2023 Guidance for Chord Energy Highlights Guidance Ranges • Implied FY 2023 Metrics at midpoint run at $75 & $3.50 1Q23 FY2023 • EBITDA: ~$1.75B Oil Volumes (MBopd) 91.5 - 94.5 94.5 - 98.5 Gas Volumes (MMcfpd) 212.0 - 218.0 215.0 - 221.0 • FCF: ~$825MM NGL Volumes (MBblpd) 34.5 - 35.5 35.5 - 36.5 •
Slide 18: Chord Financial and Operational Results
Chord Financial and Operational Results 90 91 92 92 Financial Highlights ($MM) 1Q22 2Q22 3Q22 4Q22 Key Operating Statistics 1Q22 2Q22 3Q22 4Q22 Oil Revenues $815.7 $902.4 $824.3 $738.0 Oil Production (Bopd) 97,421 89,991 96,201 95,783 NGL Revenues 58.2 51.2 106.2 78.1 NGL Production (Boepd) 37,160 3
Slide 19: Chord Energy Hedge Book & Investment in CEQP
Chord Energy Hedge Book & Investment in CEQP Oil and Natural Gas Hedge Book1 Q1-23 Q2-23 Q3-23 Q4-23 NYMEX WTI Swap volume (mbopd) 25.0 16.0 14.0 14.0 Oil Hedging Oil Volumes Hedged Weighted avg. swap price $61.57 $53.69 $50.00 $50.00 Declines ~57% Collar volume (mbopd) 36.0 24.1 14.0 12.0 through 2