8-K: Chord Energy Reports Strong Q4 and Full-Year 2024 Results, Boosts Dividend and Issues Positive 2025 Outlook

Chord Energy announced strong fourth quarter and full-year 2024 financial results, increased its base dividend by 4%, and issued a positive 2025 outlook, highlighting the success of the Enerplus acquisition and efficient capital management.

Summary

• Chord Energy reported its Q4 and full-year 2024 financial and operating results.
• The company's results for the year ended December 31, 2024, include Enerplus Corporation's results from May 31, 2024.
• Cash Flow from Operations and Adjusted Free Cash Flow exceeded expectations in 4Q24, supported by strong oil volumes and cost control.
• Chord returned 100% of Adjusted Free Cash Flow to shareholders in 4Q24, with $205.0 million used for share repurchases.
• Since closing the Enerplus combination, Chord has repurchased 3.5 million shares, representing over 5% of shares outstanding.
• The company increased its 4Q24 base dividend to $1.30 per share, a 4% increase.
• FY25 midpoint volume and capital expenditures guidance matches the three-year outlook announced in November 2024, with CapEx of $1.4 billion to deliver oil volumes of 152.5 MBopd.
• FY24 CapEx was $1,470 million on a pro forma basis, $20 million below the original full-year outlook.
• FY24 oil volumes were 153.0 MBopd on a pro forma basis, exceeding the original full-year outlook by 700 Bopd.
• The company successfully drilled its first four-mile lateral in 4Q24, with completion operations starting in 1Q25.
• Oil volumes in 4Q24 were 153.3 MBopd, exceeding midpoint guidance.
• Total volumes in 4Q24 were 273.5 MBoepd, exceeding the high-end of guidance.
• E&P and other CapEx in 4Q24 was $330.3 million, below midpoint guidance.
• Lease Operating Expense (LOE) in 4Q24 was $9.60 per Boe, below midpoint guidance.
• Net cash provided by operating activities in 4Q24 was $566.5 million, and net income was $210.6 million.
• Adjusted EBITDA in 4Q24 was $640.1 million, and Adjusted Free Cash Flow was $276.9 million.
• Estimated net proved reserves at December 31, 2024, were 883.0 MMBoe.
• The company plans to TIL 130-150 gross operated wells in 2025, with approximately 40% being 3-mile laterals.
• Chord expects to generate approximately $2.5 billion of Adjusted EBITDA and $860 million of Adjusted Free Cash Flow in 2025 (at $70/Bbl WTI and $3.50/MMBtu Henry Hub).

Sentiment

Score: 8

Explanation: The document presents a positive outlook with strong financial results, increased dividend, and successful integration of Enerplus. The company's focus on capital efficiency and shareholder returns contributes to the positive sentiment.

Positives

• Cash Flow from Operations and Adjusted Free Cash Flow exceeded expectations in 4Q24.
• The company returned 100% of Adjusted Free Cash Flow to shareholders in 4Q24.
• The base dividend increased by 4% to $1.30 per share for 4Q24.
• FY24 oil volumes exceeded the original full-year outlook by 700 Bopd.
• Chord successfully drilled its first four-mile lateral in 4Q24.
• The company's 2025 outlook is consistent with the three-year outlook announced in November 2024.
• The company had 36 gross (26.2 net) operated turn-in-line (TIL) wells in 4Q24.
• The company added 63.7 million barrels of oil equivalent (MMBoe) of net proved reserves as a result of successful drilling in the Williston Basin and 315.3 MMBoe from the purchase of reserves in place associated with the Enerplus Acquisition in May 2024.

Negatives

• 1Q25 volumes are expected to range from 149.5 152.5 MBopd due to recent winter storms with temperatures below negative 30 degrees.

Risks

• Changes in crude oil, NGL and natural gas prices could impact financial results.
• Geopolitical conditions, including the war between Russia and Ukraine and conflicts in the Middle East, could affect commodity prices.
• Inflation rates and associated monetary policy responses, including elevated interest rates, could impact the company.
• Uncertainties in estimating proved reserves and forecasting production results could affect the company's outlook.
• Environmental regulations or litigation could pose risks to the company's business.

Future Outlook

Chord Energy expects to generate approximately $2.5B of Adjusted EBITDA and $860MM of Adjusted Free Cash Flow in 2025, with oil volumes between 150.3 and 154.8 MBopd and CapEx between $1,340 and $1,460 million.

Management Comments

• 'I'm very pleased with Chord's positioning as we enter 2025,' said Danny Brown, Chord Energy's President and Chief Executive Officer.
• Mr. Brown stated that Chord's performance was supported by solid execution and excellent well results, all while maintaining a focus on cost control.
• Mr. Brown stated that the company's low-cost inventory, capital efficient development program, and strong balance sheet support sustainable free cash flow generation and high shareholder returns.

Industry Context

Chord Energy's focus on capital efficiency, longer laterals, and wider spacing reflects a broader industry trend towards optimizing well economics and maximizing free cash flow. The company's success in the Williston Basin positions it as a leader in the region.

Comparison to Industry Standards

• Chord's focus on returning capital to shareholders aligns with industry trends among large-cap E&P companies like Pioneer Natural Resources and Devon Energy.
• The company's commitment to capital discipline and free cash flow generation is comparable to strategies employed by companies such as EOG Resources and ConocoPhillips.
• Chord's operational efficiency and cost control measures are in line with best-in-class operators in the shale industry.

Stakeholder Impact

• Shareholders will benefit from the increased dividend and share repurchase program.
• Employees are recognized for their contributions to the company's strong performance.
• The company's focus on responsible operations benefits the environment and local communities.

Next Steps

• The company plans to continue its development program in the Williston Basin.
• Chord plans to TIL 130-150 gross operated wells in 2025.
• The company will continue to monitor production as temperatures improve after recent winter storms.
• The next scheduled borrowing base redetermination is expected to occur in or around October 2025.

Key Dates