Chord Energy Corporation · NASDAQ:CHRD
Chord Energy — Q1 2023 Earnings Presentation
19 slides from Chord Energy's earnings presentation, May 4, 2023
Slide 1: Delivering Value over the Next Decade
May 3, 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% • 1Q23 Production: 165MBoepd / 95MBopd 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 3.3 3.3 • Asset continues to outperform expectations 2023E EV/EBITDA • Better performance with wider spacing 3.2 • Extensive analogs across basin improve predictability 3.1 • Minimal parent / child interference in development program
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 $2,067 ($756) 30% % of Enterprise Value $1,222MM 27.0% $2,000 Returned to Shareholders 19.1% 18.9% 18.4% $1,500 20% $1,311 $MM $152 Buybacks $245 $1,000 Merger Dividends 10% 7.7% $824 4.4%
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: Chord Development Evolution
Chord Development Evolution Highlights Former Current 2015 vintage CHRD Wild CHRD Wild CHRD Painted Basin Basin Woods Completed 10-14 wells across 100 feet of vertical section 14 wells 6 wells 4 wells Conclusion: Well density suboptimal 2015 Current Current Current development pattern Middle
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 Peer-Leading Drilling Time3 200 Cumulative Oil Per Well (MBo) 600 180 Cumulative Oil Per Well (MBo) 500 160 CHRD 14.2 140 400 ~43% uplift 120 ~54% uplift E&P A 17 300 100 80 200 60 E&P B 18.3 100 40 20 E&P C 19
Slide 10: Continued Progress Drives Returns Even Higher
Continued Progress Drives Returns Even Higher Conservative Well Spacing1 Strong Well Performance2 300 1,100 80 Cumulative Oil Per Well (MBbo) Oil Rate Per Well (MBopd) 250 900 >38% 60 uplift 200 Well Count 700 150 40 500 100 ~50pt IRR Uplift Downtime related to weather/power issues 20 300 50 0 100 0
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
SS SSS SSS LSS 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 $1,000 18% 0.6 $16 16% $900 15% 16% 0.5 $14 0.5 $800 14% $14.5B 14% $12 Free Cash Flow ($MM) 0.4 2023E Net Debt/EBITDA $700 12% FCF Yield (EV) $10 $ Billions $600 0.3 10% $9.4B $500 $8 Peer
Slide 16: Return of Capital
Return of Capital Aim for peer-leading return of capital 1Q23 Return of Capital ($MM, except per share) — Below 0.5x leverage: 75%+ of FCF $199 1Q23 Free Cash Flow — Below 1.0x leverage: 50%+ of FCF x 75% Target 75%+ at Current Leverage — >1.0x leverage: Base dividend+ ($5.00/sh annual) = $149 Targe
Slide 17: 2023 Guidance for Chord Energy
2023 Guidance for Chord Energy Highlights Guidance Ranges • Implied FY 2023 Metrics at midpoint run at $75 / $2.75 2Q23 FY2023 • EBITDA: ~$1.75B Oil Volumes (MBopd) 93.5 - 96.5 95.0 - 98.0 • FCF: ~$825MM Gas Volumes (MMcfpd) 217.0 - 223.0 216.0 - 220.5 NGL Volumes (MBblpd) 33.5 - 34.5 33.0 - 34.0 •
Slide 18: Chord Financial and Operational Results
Chord Financial and Operational Results 91 92 92 90 Financial Highlights ($MM) 2Q22 3Q22 4Q22 1Q23 Key Operating Statistics 2Q22 3Q22 4Q22 1Q23 Oil Revenues $902.4 $824.3 $738.0 $650.9 Oil Production (Bopd) 89,991 96,201 95,783 95,113 NGL Revenues 51.2 106.2 78.1 62.2 NGL Production (Boepd) 34,810 3
Slide 19: Chord Energy Hedge Book
Chord Energy Hedge Book Oil and Natural Gas Hedge Book Q2-23 Q3-23 Q4-23 FY2024 NYMEX WTI Swap volume (mbopd) 16.0 14.0 14.0 Oil Hedging Weighted avg. swap price $53.69 $50.00 $50.00 Collar volume (mbopd) – pre 2023 24.1 14.0 12.0 Weighted avg. ceiling price $63.66 $65.43 $64.88 Weighted avg. floor