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Chord Energy Equity Warrants Series B Exp 01 Sep 2025

Chord Energy Reports Strong Third Quarter 2024 Financial and Operating Results, $146MM of Share Repurchases and Issues 2025 - 2027 Outlook

HOUSTON , Nov. 6, 2024 /PRNewswire/ -- Chord Energy Corporation (NASDAQ: CHRD) ("Chord", "Chord Energy" or the "Company") today reported financial and operating results for the third quarter 2024. The results for the three and nine months ended September 30, 2024 include the results of Enerplus Corporation ("Enerplus") for the period subsequent to May 31, 2024, unless otherwise noted.

Key Takeaways and Updates: 

  • Cash Flow from Operations and Adjusted Free Cash Flow exceeded expectations in 3Q24, supported by oil volumes near the high-end of guidance and capital below the low-end of guidance;
  • Lowering FY24 capital guidance, while raising FY24 oil volumes guidance;
  • Share repurchases increased to $146MM in 3Q24 or over 1.5% of shares outstanding;
  • Third-mile productivity factor increased to 100%, reflecting full contribution from last mile; and
  • Issued three-year outlook (2025 – 2027), spending $1.4B of capital annually to hold oil volumes flat.

3Q24 Operational and Financial Highlights:

  • Oil volumes of 158.8 MBopd were near the high-end of guidance, reflecting strong well performance and lower downtime;
  • Total volumes of 280.8 MBoepd were above the high-end of guidance;
  • E&P and other CapEx of $329.2MM was below the low-end of guidance reflecting lower spending and program timing;
  • Lease Operating Expense ("LOE") of $9.56 per Boe was favorable to expectations as a result of lower maintenance and improved downtime;
  • Net cash provided by operating activities was $663.2MM and net income was $225.3MM;
  • Adjusted EBITDA(1) was $674.5MM and Adjusted Free Cash Flow(1) was $312.5MM; and
  • Released 2023 Sustainability Report on September 30, 2024, highlighting Chord's commitment to sustainable business operations and continuous improvement.

3Q24 Shareholder Return Highlights:

  • Return of capital set at $234MM, or 75% of Adjusted Free Cash Flow(1);
  • Repurchased $146MM of common stock, representing more than 90% of capital returned to shareholders after the base dividend;
  • Declared a base-plus-variable cash dividend of $1.44 per share of common stock; and
  • Authorized new share repurchase program totaling $750MM, replacing the existing program.

(1) Non-GAAP financial measure. See "Non-GAAP Financial Measures" below for a reconciliation to the most directly comparable financial measures under United States generally accepted accounting principles ("GAAP").

"Chord's outstanding third quarter performance reflects solid execution and strong well performance," said Danny Brown, Chord Energy's President and Chief Executive Officer. "Production was near the top-end of guidance, while capital was below the low-end of guidance. This strong performance supported the continued execution of Chord's shareholder return strategy, which included a meaningful increase to share repurchases in the third quarter. Chord's valuation is compelling, and we expect share repurchases to comprise a significant portion of future shareholder returns, especially at current prices. In addition, three-mile lateral development continues to be a key factor driving a positive rate of change through our business, and we are seeing recoveries proportional to the increased lateral length. As a result, we are updating the productivity factor of the third mile to 100%. Congratulations to the Chord team for continuing to challenge themselves to raise the bar. Your hard work is evident in our company's success."

Mr. Brown continued, "Since closing, the Chord team has been working diligently to integrate the Enerplus assets, drive synergy capture and enhance efficiency. I'm pleased to announce a new three-year outlook, which results in holding oil volumes flat with pro forma 2024 levels from 2025 through 2027 and annual capital expenditures of $1.4 billion per year. This outcome is a material improvement in capital efficiency and illustrates the quality and depth of our inventory. Chord is a premier Williston Basin operator with enhanced scale, significant low-cost inventory, financial strength and peer-leading shareholder returns. Chord's durable free cash flow generation is evident in our improving capital efficiency and compelling long-term financial outlook. We remain focused on optimizing capital allocation while operating in a safe and sustainable manner."

3Q24 Operational and Financial Update:

The following table presents select 3Q24 operational and financial data compared to guidance released on August 7, 2024:

Metric


Actual


Guidance

Oil Volumes (MBopd)


158.8


154.5 – 159.5

NGL Volumes (MBblpd)


51.7


47.3 – 48.8

Natural Gas Volumes (MMcfpd)


421.8


418.5 – 431.5

Total Volumes (MBoepd)


280.8


271.5 – 280.2

E&P & Other CapEx ($MM)


$329.2


$335 – $365

Oil Discount to WTI ($/Bbl)


$(1.51)


$(2.25) – $(0.25)

NGL Realization (% of WTI)


8 %


8% – 18%

Natural Gas Realization (% of Henry Hub)


20 %


35% – 45%

LOE ($/Boe)


$9.56


$9.35 – $10.35

Cash GPT ($/Boe)(1)


$2.91


$2.65 – $3.25

Cash G&A ($MM)(1)


$27.9


$29.0 – $31.0

Production Taxes (% of Oil, NGL and Natural Gas Sales)


9.0 %


8.3% – 8.7%

Cash Interest ($MM)(1)


$19.8


$16.0 – $18.0

Cash Tax (% of Adjusted EBITDA)(2)


2 %


6% – 12%

___________________

(1)

Non-GAAP financial measure. See "Non-GAAP Financial Measures" below for a reconciliation to the most directly comparable financial measures under GAAP.

(2)

Guidance range based on NYMEX WTI between $70/Bbl – $90/Bbl.

Chord had 46 gross (36.0 net) operated turn-in-line ("TIL") wells in 3Q24.

During the three months ended September 30, 2024, net cash provided by operating activities was $663.2MM and net income was $225.3MM ($3.59/diluted share). Adjusted EBITDA was $674.5MM, Adjusted Free Cash Flow was $312.5MM and Adjusted Net Income was $212.8MM ($3.40/diluted share). Adjusted EBITDA, Adjusted Free Cash Flow and Adjusted Net Income are non-GAAP financial measures. See "Non-GAAP Financial Measures" below for a reconciliation to the most directly comparable financial measures under GAAP.

Return of Capital:

Chord declared a base-plus-variable cash dividend of $1.44 per share of common stock, including a base dividend of $1.25 per share of common stock and a variable dividend of $0.19 per share of common stock. The dividends will be payable on December 12, 2024 to shareholders of record as of November 27, 2024. Details regarding the calculation of the variable dividend can be found in the Company's most recent investor presentation located on its website at https://ir.chordenergy.com/presentations.

During 3Q24, the Company repurchased 951,417 shares of common stock at a weighted average price of $153.50 per share totaling $146.0MM. Share repurchases represented more than 90% of shareholder returns after the base dividend in 3Q24. Chord's Board of Directors has authorized a new share repurchase program totaling $750MM, which replaces the existing program which had approximately $445MM remaining at September 30, 2024.

Acquisition and Divestiture:

During 3Q24, Chord entered into a definitive agreement to divest its entire position in the DJ Basin. On October 25, 2024, Chord completed the sale of the DJ Basin assets and received net proceeds (after customary purchase price adjustments) of $36.1MM. Chord expects to use the net proceeds from the DJ Basin divestiture to fund recent acquisitions and repurchase shares of common stock in 4Q24.

Additionally, during 3Q24, Chord entered into agreements to acquire additional working interests in operated assets in the Williston Basin for total cash consideration of $7.0MM, which was funded with cash on hand. The net volume impact of these portfolio changes is expected to reduce 4Q24 oil volumes by approximately 0.4 MBopd.   

2025 – 2027 Outlook:

Chord expects to spend $1.4B of capital per year for each of the next three years (2025 – 2027) to maintain flat pro forma FY24 oil volumes of 152 MBopd – 153 MBopd. Chord's three-year outlook reflects the improving capital efficiency of its program, supported by high-quality inventory, enhanced operational efficiencies and over $200MM of synergies from the combination with Enerplus.

Updated 2024 Outlook:

Chord is updating its FY24 guidance to reflect 3Q24 results and its 4Q24 outlook. Chord expects to generate approximately $2.7B of Adjusted EBITDA and $1.1B of Adjusted Free Cash Flow on a pro forma basis in FY24, with a reinvestment rate less than 60%. Chord's updated outlook reflects actual pricing for 1Q24 – 3Q24 and $70/Bbl WTI and $2.50/MMBtu Henry Hub for 4Q24.

  • Full year oil volumes updated to account for strong 3Q24 performance and the latest 4Q24 outlook, which includes the impact of October wildfires and recent A&D activity. Pro forma FY24 midpoint oil volumes of 152.7 MBopd increased 0.6 MBopd from August guidance (including the impact of A&D), representing the second increase in oil guidance this year;
  • FY24 pro forma capital guidance reduced $10MM to $1.48B, reflecting program efficiencies and lower spending. 4Q24 capital reflects program timing and some deferred spending from 3Q24;
  • Full year natural gas and NGL volumes adjusted to reflect latest estimates on volume mix and activity deferrals in the Marcellus shale;
  • Lowering 4Q24 oil differentials to reflect continued pricing improvement in the Williston Basin. Adjusting 4Q24 natural gas and NGL realizations to reflect current market conditions;
  • Lowering FY24 LOE to reflect better than expected 3Q24 performance and improved 4Q24 outlook;
  • Increasing production tax estimate to account for higher oil sales and lower gas prices; and
  • Lowering cash tax guidance to reflect the acceleration of certain deferred tax benefits.

In early October, wildfires spread in select areas of North Dakota. There were no injuries to Chord staff; however, the broader community suffered two fatalities and various homes and infrastructure were damaged. During the fires, Chord coordinated with authorities to proactively shut in certain sites and facilities. The impact of these curtailments reduced 4Q24 oil volumes by approximately 0.9 MBopd and is reflected in Chord's 4Q24 guidance below.   

The following table presents select operational and financial guidance for 4Q24 and FY24:

Metric


4Q24 Guidance


FY24 Guidance(1)

Oil Volumes (MBopd)


149.5 – 154.5


152.0 – 153.3

NGL Volumes (MBblpd)


46.1 – 47.6


47.7 – 48.1

Natural Gas Volumes (MMcfpd)


395.5 – 408.5


407.6 – 410.9

Total Volumes (MBoepd)


261.5 – 270.1


267.6 – 269.8

E&P & Other CapEx ($MM)


$315 – $355


$1,460 – $1,500

Oil Discount to WTI ($/Bbl)


$(2.00) – $0.00


$(1.75) – $(1.25)

NGL Realization (% of WTI)


5% – 15%


9% – 11%

Natural Gas Realization (% of Henry Hub)


25% – 35%


34% – 36%

LOE ($/Boe)


$9.25 – $10.25


$9.38 – $9.63

Cash GPT ($/Boe)(2)


$2.60 – $3.20


$3.11 – $3.25

Cash G&A ($MM)(2)


$29.0 – $31.0


$116.2 – $118.2

Production Taxes (% of Oil, NGL and Natural Gas Sales)


8.7% – 9.1%


8.8% – 8.9%

Cash Interest ($MM)(2)


$18.0 – $20.0


$62.7 – $64.7

Cash Tax (% of Adjusted EBITDA)(3)


0% – 5%


2% – 4%

___________________

(1)

Includes the results of Enerplus for the full-year.

(2)

Non-GAAP financial measure. See "Non-GAAP Financial Measures" below for a reconciliation to the most directly comparable financial measure under GAAP.

(3)

4Q24 cash tax guidance reflects WTI prices between $60/Bbl – $80/Bbl. FY24 cash tax guidance range reflects actual prices for 1Q24 – 3Q24 and $60/Bbl – $80/Bbl in 4Q24.

Select Operational and Financial Data:

The following table presents select operational and financial data for the periods presented:

3Q24


2Q24


3Q23

Production data:






Crude oil (MBopd)

158.8


118.1


101.4

NGLs (MBblpd)

51.7


40.5


36.0

Natural gas (MMcfpd)

421.8


291.5


231.7

Total production (MBoepd)

280.8


207.2


176.0

Percent crude oil

56.6 %


57.0 %


57.6 %

Average sales prices:






Crude oil, without realized derivatives ($/Bbl)

$       73.51


$       78.89


$       83.22

Differential to NYMEX WTI ($/Bbl)

(1.51)


(1.71)


0.69

Crude oil, with realized derivatives ($/Bbl)

73.58


78.53


76.45

Crude oil realized derivatives ($MM)

(1.0)


(3.9)


(63.1)

NGL, without realized derivatives ($/Bbl)

6.31


9.99


12.38

NGL, with realized derivatives ($/Bbl)

6.31


9.99


12.38

Natural gas, without realized derivatives ($/Mcf)

0.44


0.67


1.11

Natural gas, with realized derivatives ($/Mcf)

0.44


0.67


1.11

Selected financial data ($MM):






Revenues:






Crude oil revenues

$    1,073.9


$       848.1


$       776.0

NGL revenues

30.0


36.8


41.0

Natural gas revenues

17.1


17.8


23.6

Total oil, NGL and natural gas revenues

$    1,121.0


$       902.7


$       840.6

Cash flows:






Net cash provided by operating activities:

$       663.2


$       460.9


$       399.5

Non-GAAP financial measures(1):






Adjusted EBITDA

$       674.5


$       567.9


$       469.1

Adjusted Free Cash Flow(2)

312.5


216.1


207.4

Adjusted Net Income

212.8


234.9


220.2

Select operating expenses:






LOE

$       247.1


$       176.6


$       177.1

Gathering, processing and transportation expenses ("GPT")

77.4


63.1


52.3

Production taxes

101.0


79.5


72.5

Depreciation, depletion and amortization

360.2


227.9


160.3

Total select operating expenses

$       785.7


$       547.1


$       462.2

Earnings per share:






Basic earnings per share

$          3.63


$          4.36


$          5.01

Diluted earnings per share

3.59


4.25


4.77

Adjusted diluted earnings per share (Non-GAAP)(1)

3.40


4.69


5.04

___________________

(1)

Non-GAAP financial measure. See "Non-GAAP Financial Measures" below for a reconciliation to the most directly comparable financial measures under GAAP.

(2)

2Q24 Adjusted Free Cash Flow includes $16.1MM of capital incurred related to divested non-operated assets that was reimbursed.

For the three months ended September 30, 2024, Marcellus natural gas volumes and realized natural gas prices were 114.2 MMcfpd and $1.32/Mcf, respectively. For the nine months ended September 30, 2024 (including a full-year of Enerplus), Marcellus natural gas volumes and realized natural gas prices were 116.1 MMcfpd and $1.69/Mcf, respectively. 

Capital Expenditures:

The following table presents the Company's total capital expenditures ("CapEx") by category for the periods presented:

1Q24


2Q24


3Q24


YTD24

CapEx ($MM):








E&P

$           257.7


$           312.9


$           328.4


$           899.0

Other

—


1.4


0.8


2.2

Total E&P and other CapEx(1)

257.7


314.3


329.2


901.2

Capitalized interest

0.7


1.2


1.8


3.7

Acquisitions

—


6.6


7.0


13.6

Total CapEx

$           258.4


$           322.1


$           338.0


$           918.5

___________________

(1)     YTD24 includes $20.0MM of capital incurred related to divested non-operated assets that was reimbursed.

Balance Sheet and Liquidity:

The following table presents key balance sheet data and liquidity metrics as of September 30, 2024 (in millions):

September 30, 2024

Revolving credit facility(1)

$                            1,500.0



Revolver borrowings

$                               470.0

Senior notes

400.0

Total debt

$                               870.0



Cash and cash equivalents

$                                 52.1

Letters of credit

30.7

Liquidity

1,051.4

___________________

(1)     $3.0B borrowing base and $1.5B of elected commitments.

Contact:

Chord Energy Corporation
Bob Bakanauskas, Vice President, Investor Relations
(281) 404-9600
ir@chordenergy.com

Conference Call Information

Investors, analysts and other interested parties are invited to listen to the webcast:

Date:      


Thursday, November 7, 2024

Time:


 10:00 a.m. Central

Live Webcast:


https://app.webinar.net/gzDdGodB7jl

To join the conference call by phone without operator assistance (including sell-side analysts wishing to ask a question), you may register and enter your phone number at https://emportal.ink/4d3v1Mb to receive an instant automated call back and be immediately placed into the call.

You may also use the following dial-in information to join the conference call by phone with operator assistance:

Dial-in:


1-800-836-8184

Intl. Dial-in:


1-646-357-8785

Conference ID:


63394

A recording of the conference call will be available beginning at 1:00 p.m. Central on the day of the call and will be available until Thursday, November 14, 2024 by dialing:

Replay dial-in:

1-888-660-6345

Intl. replay:

1-646-517-4150

Replay access:

63394 #

The call will also be available for replay for approximately 30 days at https://www.chordenergy.com 

Forward-Looking Statements and Cautionary Statements

Certain statements in this press release, other than statements of historical facts, that address activities, events or developments that Chord expects, believes or anticipates will or may occur in the future, including any statements regarding the benefits and synergies of the Enerplus combination, future opportunities for Chord, future financial performance and condition, guidance and statements regarding Chord's expectations, beliefs, plans, financial condition, objectives, assumptions or future events or performance are forward-looking statements based on assumptions currently believed to be valid. Forward-looking statements are all statements other than statements of historical facts. The words "anticipate," "believe," "ensure," "expect," "if," "intend," "estimate," "probable," "project," "forecasts," "predict," "outlook," "aim," "will," "could," "should," "would," "potential," "may," "might," "anticipate," "likely," "plan," "positioned," "strategy" and similar expressions or other words of similar meaning, and the negatives thereof, are intended to identify forward-looking statements. Specific forward-looking statements include statements regarding Chord's plans and expectations with respect to the return of capital plan, production levels and reinvestment rates, anticipated financial and operating results and other guidance and the effects, benefits and synergies of the Enerplus combination. The forward-looking statements are intended to be subject to the safe harbor provided by Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995.

These statements are based on certain assumptions made by Chord based on management's experience and perception of historical trends, current conditions, anticipated future developments and other factors believed to be appropriate. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of Chord, which may cause actual results to differ materially from those implied or expressed by the forward-looking statements. These include, but are not limited to, the ultimate results of integrating the operations of Chord, the effects of the Enerplus combination on Chord, including Chord's future financial condition, results of operations, strategy and plans, the ability of Chord to realize the anticipated benefits or synergies of the Enerplus combination in the timeframe expected or at all, changes in crude oil, NGL and natural gas prices, war between Russia and Ukraine as well as was between Israel and Hamas and the potential for escalation of hostilities across the surrounding countries in the Middle East and their effect on commodity prices, changes in general economic and geopolitical conditions, including as a result of the 2024 U.S. presidential election, inflation rates and the impact of associated monetary policy responses, including increased interest rates, developments in the global economy, the impact of pandemics such as COVID-19, weather and environmental conditions, the timing of planned capital expenditures, availability of acquisitions, uncertainties in estimating proved reserves and forecasting production results, operational factors affecting the commencement or maintenance of producing wells, the condition of the capital markets generally, as well as Chord's ability to access them, the proximity to and capacity of transportation facilities, the availability of midstream service providers, uncertainties regarding environmental regulations or litigation and other legal or regulatory developments affecting Chord's business and other important factors that could cause actual results to differ materially from those projected as described in Chord's reports filed with the U.S. Securities and Exchange Commission (the "SEC").

Any forward-looking statement speaks only as of the date on which such statement is made and Chord undertakes no obligation to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by applicable law. As forward-looking statements involve significant risks and uncertainties, caution should be exercised against placing undue reliance on such statements. Additional information concerning other risk factors is also contained in Chord's most recently filed Annual Report on Form 10-K for the year ended December 31, 2023, subsequent Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other SEC filings.

About Chord Energy

Chord Energy Corporation is an independent exploration and production company with quality and sustainable long-lived assets primarily in the Williston Basin. The Company is uniquely positioned with a best-in-class balance sheet and is focused on rigorous capital discipline and generating free cash flow by operating efficiently, safely and responsibly to develop its unconventional onshore oil-rich resources in the continental United States. For more information, please visit the Company's website at www.chordenergy.com. 

Comparability of Financial Statements

The results reported for the three and nine months ended September 30, 2024 reflect the consolidated results of Chord, including combined operations with Enerplus beginning on May 31, 2024 and the 2023 acquisition of acreage in the Williston Basin, while the results reported for the three and nine months ended September 30, 2023 reflect the consolidated results of Chord, including the 2023 acquisition of acreage in the Williston Basin beginning on June 30, 2023 and excluding the impact from the business combination with Enerplus, unless otherwise noted.

 

Chord Energy Corporation

Condensed Consolidated Balance Sheets (Unaudited)

(In thousands, except share data)



September 30, 2024


December 31, 2023





ASSETS




Current assets




Cash and cash equivalents

$                  52,050


$                317,998

Accounts receivable, net

1,294,597


943,114

Inventory

77,460


72,565

Prepaid expenses

31,703


42,450

Derivative instruments

55,667


37,369

Other current assets

2,061


11,055

Current assets held for sale

38,598


—

Total current assets

1,552,136


1,424,551

Property, plant and equipment




Oil and gas properties (successful efforts method)

12,434,669


6,320,243

Other property and equipment

58,082


49,051

Less: accumulated depreciation, depletion and amortization

(1,797,305)


(1,054,616)

Total property, plant and equipment, net

10,695,446


5,314,678

Derivative instruments

30,987


22,526

Investment in unconsolidated affiliate

116,504


100,172

Long-term inventory

25,861


22,936

Operating right-of-use assets

48,653


21,343

Goodwill

539,793


—

Other assets

24,783


19,944

Total assets

$          13,034,163


$             6,926,150





LIABILITIES AND STOCKHOLDERS' EQUITY




Current liabilities




Accounts payable

$                  68,386


$                  34,453

Revenues and production taxes payable

769,540


604,704

Accrued liabilities

738,991


493,381

Accrued interest payable

11,839


2,157

Derivative instruments

3


14,209

Advances from joint interest partners

2,434


2,381

Current operating lease liabilities

40,138


13,258

Other current liabilities

27,704


916

Current liabilities held for sale

2,745


—

Total current liabilities

1,661,780


1,165,459

Long-term debt

867,173


395,902

Deferred tax liabilities

1,421,403


95,322

Asset retirement obligations

279,892


155,040

Derivative instruments

45


717

Operating lease liabilities

21,065


18,667

Other liabilities

5,891


18,419

Total liabilities

4,257,249


1,849,526

Commitments and contingencies




Stockholders' equity




Common stock, $0.01 par value: 240,000,000 shares authorized, 66,772,383 shares
issued and 61,479,508 shares outstanding at September 30, 2024; and 120,000,000
shares authorized, 45,032,537 shares issued and 41,249,658 shares outstanding at
December 31, 2023

671


456

Treasury stock, at cost: 5,292,875 shares at September 30, 2024 and 3,782,879 shares
at December 31, 2023

(732,263)


(493,289)

Additional paid-in capital

7,329,177


3,608,819

Retained earnings

2,179,329


1,960,638

Total stockholders' equity

8,776,914


5,076,624

Total liabilities and stockholders' equity

$          13,034,163


$             6,926,150

 

Chord Energy Corporation

Condensed Consolidated Statements of Operations (Unaudited)

(In thousands, except per share data)

 


Three Months Ended September 30,


Nine Months Ended September 30,


2024


2023


2024


2023









Revenues








Oil, NGL and gas revenues

$      1,121,012


$         840,625


$      2,771,841


$      2,302,251

Purchased oil and gas sales

329,455


282,743


1,024,567


629,705

Total revenues

1,450,467


1,123,368


3,796,408


2,931,956

Operating expenses








Lease operating expenses

247,055


177,115


582,908


489,077

Gathering, processing and transportation expenses

77,353


52,294


194,467


132,706

Purchased oil and gas expenses

329,622


281,615


1,021,739


627,433

Production taxes

100,973


72,485


244,410


191,490

Depreciation, depletion and amortization

360,214


160,293


757,036


431,131

General and administrative expenses

52,115


26,117


159,904


100,775

Exploration and impairment

7,269


1,611


14,908


33,257

Total operating expenses

1,174,601


771,530


2,975,372


2,005,869

Gain (loss) on sale of assets, net

(2,973)


899


13,814


3,739

Operating income

272,893


352,737


834,850


929,826

Other income (expense)








Net gain (loss) on derivative instruments

52,721


(85,205)


29,753


11,247

Net gain from investment in unconsolidated affiliate

1,089


13,512


23,246


21,421

Interest expense, net of capitalized interest

(19,146)


(7,923)


(38,946)


(22,286)

Other income (expense)

(2,657)


1,651


4,253


9,137

Total other income (expense), net

32,007


(77,965)


18,306


19,519

Income before income taxes

304,900


274,772


853,156


949,345

Income tax expense

(79,584)


(65,696)


(215,126)


(227,199)

Net income

$         225,316


$         209,076


$         638,030


$         722,146

Earnings per share:








Basic

$                3.63


$                5.01


$              12.61


$              17.28

Diluted

$                3.59


$                4.77


$              12.34


$              16.54

Weighted average shares outstanding:








Basic

61,802


41,563


50,388


41,670

Diluted

62,629


43,662


51,507


43,527

 

Chord Energy Corporation

Condensed Consolidated Statements of Cash Flows (Unaudited)

(In thousands)

 


Nine Months Ended September 30,


2024


2023





Cash flows from operating activities:




Net income

$        638,030


$        722,146

Adjustments to reconcile net income to net cash provided by operating activities:




Depreciation, depletion and amortization

757,036


431,131

Gain on sale of assets

(13,814)


(3,739)

Impairment

9,838


28,964

Deferred income taxes

146,882


176,678

Net gain on derivative instruments

(29,753)


(11,247)

Net gain from investment in unconsolidated affiliate

(23,246)


(21,421)

Equity-based compensation expenses

16,053


37,260

Deferred financing costs amortization and other

6,407


1,072

Working capital and other changes:




Change in accounts receivable, net

(19,112)


(258,175)

Change in inventory

(6,937)


(4,945)

Change in prepaid expenses

8,090


430

Change in accounts payable, interest payable and accrued liabilities

70,538


135,880

Change in other assets and liabilities, net

(29,240)


42,483

Net cash provided by operating activities

1,530,772


1,276,517

Cash flows from investing activities:




Capital expenditures

(877,381)


(642,584)

Acquisitions, net of cash acquired

(652,672)


(361,609)

Proceeds from divestitures

21,788


46,002

Derivative settlements

(17,760)


(203,238)

Proceeds from sale of investment in unconsolidated affiliate

—


40,612

Contingent consideration received

25,000


—

Distributions from investment in unconsolidated affiliate

6,914


8,499

Net cash used in investing activities

(1,494,111)


(1,112,318)

Cash flows from financing activities:




Proceeds from revolving credit facilities

2,250,000


135,000

Principal payments on revolving credit facilities

(1,780,000)


(135,000)

Cash paid to settle Enerplus senior notes

(63,000)


—

Deferred financing costs

(3,313)


—

Repurchases of common stock

(239,804)


(157,122)

Tax withholding on vesting of equity-based awards

(57,979)


(13,823)

Chord dividends paid

(437,725)


(394,652)

Payments on finance lease liabilities

(1,242)


(1,398)

Proceeds from warrants exercised

30,454


74,611

Net cash used in financing activities

(302,609)


(492,384)

Decrease in cash and cash equivalents

(265,948)


(328,185)

Cash and cash equivalents:




Beginning of period

317,998


593,151

End of period

$          52,050


$        264,966





Supplemental non-cash transactions(1):




Change in accrued capital expenditures

$          42,306


$          77,091

Change in asset retirement obligations

3,869


1,057

Dividends payable

20,572


36,044

___________________ 

(1)    Amounts exclude non-cash consideration transferred and balances acquired on May 31, 2024 in respect of the arrangement with Enerplus.

Non-GAAP Financial Measures

The following are non-GAAP financial measures not prepared in accordance with GAAP that are used by management and external users of the Company's financial statements, such as industry analysts, investors, lenders and rating agencies. The Company believes that the foregoing are useful supplemental measures that provide an indication of the results generated by the Company's principal business activities. However, these measures are not recognized by GAAP and do not have a standardized meaning prescribed by GAAP. Therefore, these measures may not be comparable to similar measures provided by other issuers. From time to time, the Company provides forward-looking forecasts of these measures; however, the Company is unable to provide a quantitative reconciliation of the forward-looking non-GAAP measures to the most directly comparable forward-looking GAAP measures because management cannot reliably quantify certain of the necessary components of such forward-looking GAAP measures. The reconciling items in future periods could be significant. To see how the Company reconciles its historical presentations of these non-GAAP financial measures to the most directly comparable GAAP measures, please visit the Investors—Documents & Disclosures—Non-GAAP Reconciliation page on the Company's website at https://ir.chordenergy.com/non-gaap. 

Cash GPT

The Company defines Cash GPT as total GPT expenses less non-cash valuation charges on pipeline imbalances and non-cash mark-to-market adjustments on transportation contracts accounted for as derivative instruments. Cash GPT is not a measure of GPT expenses as determined by GAAP. Management believes that the presentation of Cash GPT provides useful additional information to investors and analysts to assess the cash costs incurred to market and transport the Company's commodities from the wellhead to delivery points for sale without regard to the change in value of its pipeline imbalances, which vary monthly based on commodity prices, and without regard to the non-cash mark-to-market adjustments on transportation contracts classified as derivative instruments.

The following table presents a reconciliation of the GAAP financial measure of GPT expenses to the non-GAAP financial measure of Cash GPT for the periods presented:

Three Months Ended September 30,


Nine Months Ended September 30,


2024


2023


2024


2023










(In thousands)

GPT

$           77,353


$           52,294


$         194,467


$         132,706

Pipeline imbalances

(2,114)


234


(2,796)


(7,902)

Gain (loss) on derivative transportation contracts(1)

—


(1,432)


(5,877)


16,847

Cash GPT

$           75,239


$           51,096


$         185,794


$         141,651

___________________

(1)

The Company had buy/sell transportation contracts that qualified as derivatives. The changes in the fair value of these contracts was recorded to GPT expense. As of June 30, 2024, the term of all remaining contracts expired.

Cash G&A

The Company defines Cash G&A as total G&A expenses less G&A expenses directly attributable to certain merger and acquisition activity, non-cash equity-based compensation expenses and other non-cash charges. Cash G&A is not a measure of G&A expenses as determined by GAAP. Management believes that the presentation of Cash G&A provides useful additional information to investors and analysts to assess the Company's operating costs in comparison to peers without regard to the aforementioned charges, which can vary substantially from company to company.

The following table presents a reconciliation of the GAAP financial measure of G&A expenses to the non-GAAP financial measure of Cash G&A for the periods presented:

Three Months Ended September 30,


Nine Months Ended September 30,


2024


2023


2024


2023










(In thousands)

General and administrative expenses

$           52,115


$           26,117


$         159,904


$         100,775

Merger costs(1)

(17,503)


—


(80,297)


(9,701)

Equity-based compensation expenses

(5,918)


(10,082)


(16,053)


(37,260)

Other non-cash adjustments

(829)


(2,292)


633


(4,165)

Cash G&A

$           27,865


$           13,743


$           64,187


$           49,649

___________________

(1)

Includes costs directly attributable to the arrangement with Enerplus for the three and nine months ended September 30, 2024 and the costs directly attributable to the merger of equals with Whiting Petroleum Corporation ("Whiting") for the nine months ended September 30, 2023.

Cash Interest

The Company defines Cash Interest as interest expense plus capitalized interest less amortization and write-offs of deferred financing costs. Cash Interest is not a measure of interest expense as determined by GAAP. Management believes that the presentation of Cash Interest provides useful additional information to investors and analysts for assessing the interest charges incurred on the Company's debt to finance its operating activities and the Company's ability to maintain compliance with its debt covenants.

The following table presents a reconciliation of the GAAP financial measure of interest expense to the non-GAAP financial measure of Cash Interest for the periods presented:

Three Months Ended September 30,


Nine Months Ended September 30,


2024


2023


2024


2023










(In thousands)

Interest expense

$           19,146


$              7,923


$           38,946


$           22,286

Capitalized interest

1,839


857


3,707


3,601

Amortization of deferred financing costs

(1,140)


(1,224)


(3,398)


(3,633)

Cash Interest

$           19,845


$              7,556


$           39,255


$           22,254

Adjusted EBITDA and Adjusted Free Cash Flow

The Company defines Adjusted EBITDA as earnings before interest expense, income taxes, depreciation, depletion and amortization ("DD&A"), merger costs, exploration expenses, impairment expenses and other similar non-cash or non-recurring charges. The Company defines Adjusted Free Cash Flow as Adjusted EBITDA less Cash Interest and E&P and other capital expenditures (excluding capitalized interest and acquisition capital).

Adjusted EBITDA and Adjusted Free Cash Flow are not measures of net income or cash flows from operating activities as determined by GAAP. Management believes that the presentation of Adjusted EBITDA and Adjusted Free Cash Flow provides useful additional information to investors and analysts for assessing the Company's results of operations, financial performance, ability to generate cash from its business operations without regard to its financing methods or capital structure and the Company's ability to maintain compliance with its debt covenants.

The following table presents reconciliations of the GAAP financial measures of net income and net cash provided by operating activities to the non-GAAP financial measures of Adjusted EBITDA and Adjusted Free Cash Flow for the periods presented:

Three Months Ended September 30,


Nine Months Ended September 30,


2024


2023


2024


2023


(In thousands)

Net income

$         225,316


$         209,076


$         638,030


$         722,146

Interest expense, net of capitalized interest

19,146


7,923


38,946


22,286

Income tax expense

79,584


65,696


215,126


227,199

Depreciation, depletion and amortization

360,214


160,293


757,036


431,131

Merger costs(1)

17,503


—


80,297


9,701

Exploration and impairment expenses

7,269


1,611


14,908


33,257

(Gain) loss on sale of assets

2,973


(899)


(13,814)


(3,739)

Net (gain) loss on derivative instruments

(52,721)


85,205


(29,753)


(11,247)

Realized gain (loss) on commodity price derivative contracts

953


(63,131)


(4,305)


(206,229)

Net gain from investment in unconsolidated affiliate

(1,089)


(13,512)


(23,246)


(21,421)

Distributions from investment in unconsolidated affiliate

2,323


2,515


6,914


8,499

Equity-based compensation expenses

5,918


10,082


16,053


37,260

Other non-cash adjustments

7,118


4,246


11,018


(1,813)

Adjusted EBITDA

674,507


469,105


1,707,210


1,247,030

Cash Interest

(19,845)


(7,556)


(39,255)


(22,254)

E&P and other capital expenditures

(329,187)


(254,183)


(901,245)


(713,491)

Cash taxes paid

(13,000)


—


(38,500)


—

Adjusted Free Cash Flow

$         312,475


$         207,366


$         728,210


$         511,285









Net cash provided by operating activities

$         663,198


$         399,470


$      1,530,772


$      1,276,517

Changes in working capital

(41,416)


86,704


(23,339)


84,328

Interest expense, net of capitalized interest

19,146


7,923


38,946


22,286

Current income tax expense

3,401


34,874


68,243


50,521

Merger costs(1)

17,503


—


80,297


9,701

Exploration expenses

1,345


1,611


5,071


4,292

Realized gain (loss) on commodity price derivative contracts

953


(63,131)


(4,305)


(206,229)

Distributions from investment in unconsolidated affiliate

2,323


2,515


6,914


8,499

Deferred financing costs amortization and other

936


(5,107)


(6,407)


(1,072)

Other non-cash adjustments

7,118


4,246


11,018


(1,813)

Adjusted EBITDA

674,507


469,105


1,707,210


1,247,030

Cash Interest

(19,845)


(7,556)


(39,255)


(22,254)

E&P and other capital expenditures(2)

(329,187)


(254,183)


(901,245)


(713,491)

Cash taxes paid

(13,000)


—


(38,500)


—

Adjusted Free Cash Flow

$         312,475


$         207,366


$         728,210


$         511,285

___________________

(1)

Includes costs directly attributable to the arrangement with Enerplus for the three and nine months ended September 30, 2024 and the costs directly attributable to the merger of equals with Whiting for the nine months ended September 30, 2023.

(2)

The nine months ended September 30, 2024 includes approximately $20.0MM of capital incurred related to divested non-operated assets that was reimbursed.

Adjusted Net Income and Adjusted Diluted Earnings Per Share 

Adjusted Net Income and Adjusted Diluted Earnings Per Share are supplemental non-GAAP financial measures that are used by management and external users of the Company's financial statements, such as industry analysts, investors, lenders and rating agencies. The Company defines Adjusted Net Income as net income after adjusting for (1) the impact of certain non-cash items, including non-cash changes in the fair value of derivative instruments, non-cash changes in the fair value of the Company's investment in an unconsolidated affiliate, impairment and other similar non-cash charges, (2) merger costs and (3) the impact of taxes based on the Company's effective tax rate applicable to those adjusting items in the same period. Adjusted Net Income is not a measure of net income as determined by GAAP.

The Company calculates earnings per share under the two-class method in accordance with GAAP. The two-class method is an earnings allocation formula that computes earnings per share for each class of common stock and participating security according to dividends declared (or accumulated) and participation rights in undistributed earnings. Adjusted Diluted Earnings Per Share is calculated as (i) Adjusted Net Income (ii) less distributed and undistributed earnings allocated to participating securities (iii) divided by the weighted average number of diluted shares outstanding for the periods presented.

The following table presents reconciliations of the GAAP financial measure of net income to the non-GAAP financial measure of Adjusted Net Income and the GAAP financial measure of diluted earnings per share to the non-GAAP financial measure of Adjusted Diluted Earnings Per Share for the periods presented:

Three Months Ended September 30,


Nine Months Ended September 30,


2024


2023


2024


2023


(In thousands, except per share data)

Net income

$     225,316


$     209,076


$     638,030


$     722,146

Net (gain) loss on derivative instruments

(52,721)


85,205


(29,753)


(11,247)

Realized gain (loss) on commodity price derivative contracts

953


(63,131)


(4,305)


(206,229)

Net gain from investment in unconsolidated affiliate

(1,089)


(13,512)


(23,246)


(21,421)

Distributions from investment in unconsolidated affiliate

2,323


2,515


6,914


8,499

Impairment

5,919


—


9,838


28,964

Merger costs(1)

17,503


—


80,297


9,701

(Gain) loss on sale of assets

2,973


(899)


(13,814)


(3,739)

Amortization of deferred financing costs

1,140


1,224


3,398


3,633

Other non-cash adjustments

7,118


4,246


11,018


(1,813)

Tax impact(2)

4,145


(3,742)


(9,802)


46,270

Adjusted net income

213,580


220,982


668,575


574,764

Distributed and undistributed earnings allocated to participating securities

(734)


(817)


(2,681)


(1,674)

Adjusted net income attributable to common stockholders

$     212,846


$     220,165


$     665,894


$     573,090









Diluted earnings per share

$           3.60


$           4.79


$         12.39


$         16.59

Net (gain) loss on derivative instruments

(0.84)


1.95


(0.58)


(0.26)

Realized gain (loss) on commodity price derivative contracts

0.02


(1.45)


(0.08)


(4.74)

Net gain from investment in unconsolidated affiliate

(0.02)


(0.31)


(0.45)


(0.49)

Distributions from investment in unconsolidated affiliate

0.04


0.06


0.13


0.20

Impairment

0.09


—


0.19


0.67

Merger costs(1)

0.28


—


1.56


0.22

(Gain) loss on sale of assets

0.05


(0.02)


(0.27)


(0.09)

Amortization of deferred financing costs

0.02


0.03


0.07


0.08

Other non-cash adjustments

0.11


0.10


0.21


(0.04)

Tax impact(2)

0.06


(0.09)


(0.19)


1.06

Adjusted Diluted Earnings Per Share

3.41


5.06


12.98


13.20

Less: Distributed and undistributed earnings allocated to participating securities

(0.01)


(0.02)


(0.05)


(0.04)

Adjusted Diluted Earnings Per Share

$           3.40


$           5.04


$         12.93


$         13.16









Diluted weighted average shares outstanding

62,629


43,662


51,507


43,527









Effective tax rate applicable to adjustment items(2)

26.1 %


23.9 %


25.2 %


23.9 %

_____________________

(1)

Includes costs directly attributable to the arrangement with Enerplus for the three and nine months ended September 30, 2024 and the costs directly attributable to the merger of equals with Whiting for the nine months ended September 30, 2023.

(2)

The tax impact is computed utilizing the Company's effective tax rate applicable to the adjustments for certain non-cash and non-recurring items.

 

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SOURCE Chord Energy