Bill Barrett Management Discusses Q4 2012 Results - Earnings Call Transcript
February 22, 2013 5:50 PM ET
Bill Barrett (BBG)
Q4 2012 Earnings Call
February 22, 2013 11:00 am ET
Jennifer C. Martin - Vice President of Investor Relations
R. Scot Woodall - Interim Chief Executive Officer, President and Chief Operating Officer
Robert W. Howard - Chief Financial Officer and Treasurer
Ryan Oatman - SunTrust Robinson Humphrey, Inc., Research Division
Ryan Todd - Deutsche Bank AG, Research Division
Pearce W. Hammond - Simmons & Company International, Research Division
Neal Dingmann - SunTrust Robinson Humphrey, Inc., Research Division
Jason A. Wangler - Wunderlich Securities Inc., Research Division
Brian Singer - Goldman Sachs Group Inc., Research Division
Jeffrey W. Robertson - Barclays Capital, Research Division
Good day, ladies and gentlemen, and welcome to the Fourth Quarter and Full Year 2012 Bill Barrett Corporation Earnings Conference Call. My name is Darcel, and I will be your operator for today. [Operator Instructions] I would now like to turn the conference over to your host for today, Ms. Jennifer Martin, Vice President of Investor Relations. Please proceed.
Jennifer C. Martin
Thank you, Darcel. Good morning, everybody, and thank you for joining us. Presenting today will be Chief Executive Officer, Scot Woodall; and Chief Financial Officer, Bob Howard.
A few quick notes before we get started. Our annual report on Form 10-Q was filed a few minutes ago and either is or shortly will be available on our website under SEC Filings. Second, as usual, I need to remind everyone of the forward-looking and other cautionary statements provided in yesterday's earnings release.
In addition, during our discussion, we may reference to discretionary cash flow and adjusted net income, which are non-GAAP measures. Reconciliations to the appropriate GAAP measures may be found in the earnings release, which is posted on the homepage of our website. We also reference reserve and risk resources for which there is additional disclosure in yesterday's release.
Lastly, we will be participating in a couple of upcoming conferences. Bob Howard will be at the Simmons Conference next Friday, hosting one-on-one and several of us will be in New Orleans for the Howard Weil Conference later in March. Scot Woodall will present at the Howard Weil Conference on March 18, and we hope to see many of you there.
With that, I'll turn it over to Scot.
R. Scot Woodall
Good morning, and thank you all for joining us. We released the majority of our year-end information on January 31 and the final financial statements yesterday.
Given that most of the information was provided a few weeks ago, and we have spoken with many of you in the interim, I do not think there were many surprises in yesterday's material. I would like today's discussion to focus and our strategy and to look forward. Bob will recap the earnings report in his discussion following mine.
We assumed the last 2 years transitioning the company to have a better commodity mix. We believe that a balanced commodity mix would better position our company to respond to changing commodity prices and create stability when making capital deployment decisions.
The end result would enable us to drive cash flow. This transition to time and capital. I believe the transition is complete. Our company now has 2 scalable oil development programs to complement our legacy development gas and NGL positions.
These development programs offers substantial growth to the development of nearly 3,000 gross oil locations and 1,000 [indiscernible].
Our production is more balanced [indiscernible] Fixed NGLs. We exit [indiscernible] oil per day representing 24% of our production.
If I review where the company is today, I believe we have accomplished our goal of building a better commodity balance in our portfolio. The company is well positioned to drive value.
So as I look forward to 2013 and beyond, the focus of the company is execution, and I am very comfortable that we have the resources and people to carry out that execution.
When this company exploited our gas assets, we demonstrated year-over-year improvements in EURs, capital costs and lease operating expenses. I expect the same results as we exploit these new oil assets.
I would like to provide a few highlights of our core oil programs. Let's start first with the DJ. In 2013, we will spend about 40% of our capital budget or about $200 million running a 2-rig program to drill about 65 gross operating wells and participate in another 20 wells.
Our entire focus will be on the 40,000 acres in the Northeast Wattenberg area. One rig will continue pad drilling near our initial 3 pads, while the second rig will delineate our acreage position to the East.
As we provided in our most recent investor presentation, we are very encouraged by results to date on our first 3 4-well pads. These wells, on average, are following a 300,000-barrel EUR type curve after flowing the first 90 days. Our acreage position is in the midst of where our peers who have been operating in the area longer than we have are having positive results.
We are very encouraged by the results of these wells with [ph] both in and around our position, particularly in light of the geological and geophysical parameters that we are able to map through the area. Our delineation program in 2013 is designed to prove these concepts.
The approximately 1,100 locations in our inventory represent our early assessment of the acreage. It's comprised of 8 wells per section on a limited portion of the acreage and 4 wells per section on a portion of the remaining acreage.
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