• Adjusted Free Cash Flow (Q4 2024): $282 million.
• Shareholder Returns (2024): $944 million returned to shareholders.
• Share Repurchases: Greater than 5% of shares outstanding repurchased since Enerplus transaction.
• Base Dividend Increase: 4% increase to $1.30 per share.
• Oil Production Growth (3-Year CAGR): 12% compounded annual growth rate.
• Capital Investment (2025): $1.4 billion planned, $90 million less than 2024.
• Expected Free Cash Flow (2025): Approximately $860 million at benchmark prices.
• Operating Expenses (Q4 2024): Below expectations.
• Oil Volumes (Q4 2024): Above midpoint of guidance.
• LOE (Q4 2024): $9.60 per BOE.
• Cash G&A (Q4 2024): $31.2 million, excluding merger-related costs.
• Adjusted CapEx (Q4 2024): $325 million, $10 million below midpoint guidance.
• Net Leverage (Year-End 2024): 0.3x.
• Borowing Base (February 2025): $2.75 billion.

• Warning! GuruFocus has detected 4 Warning Sign with CHRD.

Release Date: February 26, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Chord Energy Corp (NASDAQ:CHRD) successfully integrated with Enerplus, extracting significant value and operational synergies.
• The company returned $944 million to shareholders in 2024 and repurchased over 5% of its shares outstanding.
• Chord Energy Corp (NASDAQ:CHRD) achieved a 12% compounded annual growth rate in oil production per share over the last three years.
• Fourth-quarter oil volumes exceeded guidance, and operating expenses were below expectations, leading to strong free cash flow.
• The company plans to maintain a low reinvestment rate, generating approximately $860 million of free cash flow in 2025.

Negative Points

• Chord Energy Corp (NASDAQ:CHRD) faces potential widening of oil differentials in the first quarter of 2025 due to increased basin production.
• The company's 2025 guidance reflects modest escalation in lease operating expenses compared to 2024.
• There is uncertainty regarding the impact of tariffs on oil and gas NGL realizations.
• The integration of Enerplus required adjustments to reserves under U.S. SEC rules, potentially affecting inventory assessments.
• Chord Energy Corp (NASDAQ:CHRD) acknowledges that its non-core Marcellus position may require strategic decisions to maximize shareholder value.

Q & A Highlights

Q: Can you give us some context around your outlook for capital in 2025 and what could drive you to the lower end of the range? A: Daniel Brown, CEO: We provide ranges for our capital outlook, and improvements in efficiency and cycle times could drive us to the lower end. We aim to maintain production levels, and if well performance is better than expected, we might reduce capital spending. Over a three-year timeframe, improvements like 4-mile laterals could benefit our capital program.

Q: Regarding 3-mile laterals, where do you see the curves per foot converging in the life of the well? A: Daniel Brown, CEO: We see convergence on an EUR per foot basis after about six months, reaching 95% equivalence to 2-mile wells. By one year, they are fully converged.

Q: What operational challenges have you observed with your first 4-mile lateral, and what cost benefits do you see? A: Darrin Henke, COO: The first 4-mile lateral went smoothly, with no significant operational issues. We expect similar uplift in performance as seen when moving from 2-mile to 3-mile laterals, and we're exploring ways to convert more inventory to longer laterals.

Q: With the integration complete, can you continue to improve operational efficiencies, especially with longer laterals? A: Daniel Brown, CEO: We expect incremental improvements with more practice on 3-mile laterals and significant improvements on 4-mile laterals. Our history shows that we drive efficiencies quickly, and we aim to convert some 3-mile wells to 4-mile if successful.

Q: How do you view the M&A landscape, and how active might you be in pursuing opportunities? A: Daniel Brown, CEO: We have a strong inventory and will be patient with M&A. We seek opportunities that deliver true shareholder value and will evaluate transactions that enhance our position.

Q: How do tariffs impact your oil and gas NGL realizations? A: Daniel Brown, CEO: Tariffs generally benefit domestic producers, potentially providing a small incremental pull on domestic barrels. However, the broader effects on supply-demand dynamics are complex.

Q: Would you consider using the balance sheet to go above 100% buybacks given the stock's valuation? A: Daniel Brown, CEO: It's a capital allocation decision. We have used the balance sheet for compelling opportunities in the past, and we find our shares attractive at current levels.

Q: Can you provide more details on your inventory duration and assumptions? A: Daniel Brown, CEO: Our inventory is primarily a middle Bakken program with conservative spacing. We aim to convert more inventory to longer laterals, which could extend our inventory duration.

Q: How do you view your non-op Marcellus position given the gas price environment? A: Daniel Brown, CEO: The Marcellus is a strong asset but not core to our portfolio. We aim to maximize shareholder value, potentially through monetization, and will decide based on capital allocation priorities.

Q: Are there any new frac protection issues with 4-mile laterals? A: Daniel Brown, CEO: No significant frac protection issues have been identified with straight 4-mile laterals, which are the most efficient. We continue to explore alternate well shapes for efficiency.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.