Chord Energy Corporation today announced financial and operating results for the quarter and year ending December 31, 2022. The Company completed the merger of equals transaction between Oasis Petroleum and Whiting Petroleum Corporation on July 1, 2022. The results for the fourth quarter of 2022 presented within this release represent the consolidated results for Chord. The results for the year ended December 31, 2022 include the results of legacy Oasis for the period from January 1, 2022 through June 30, 2022 and the consolidated results of Chord for the period from July 1, 2022 through December 31, 2022, unless noted otherwise.

4Q22 Operational and Financial Highlights:

• Severe winter weather impacted production and deferred development activity, resulting in oil volumes and capital below guidance;
• Produced 171.3 MBoepd in 4Q22, with oil volumes of 95.8 MBopd;
• E&P and other CapEx was $164.1MM in 4Q22;
• Net cash provided by operating activities was $478.4MM and net income was $377.6MM in 4Q22;
• Adjusted EBITDA(1) was $475.6MM and Adjusted Free Cash Flow(1) was $304.4MM in 4Q22;
• Cash of $593.2MM exceeded debt of $400.0MM at December 31, 2022; and
• Estimated net proved reserves were 655.6 MMBoe and PV-10 was $14.5 billion at December 31, 2022.

Shareholder Return Highlights:

• Total return of capital for 4Q22 set at 75% of Adjusted Free Cash Flow;
• Declared a base-plus-variable cash dividend of $4.80 per share of common stock. The dividend will be payable on March 21, 2023 to shareholders of record as of March 7, 2023; and
• Pro forma return of capital to shareholders was over $1.2B in FY22 (including 4Q22 dividend declarations to be paid in 1Q23) including over $1B of base, variable and special dividends plus cash merger consideration supplemented by $152MM of common stock repurchases.

2023 Outlook:

• Investing capital of $825MM – $865MM with ~80% allocated to drilling and completions;
• Holding oil volumes flat to slightly growing year-over-year pro forma for merger; and
• Projecting Adjusted Free Cash Flow(1) over $825MM at $75/Bbl WTI and $3.50/MMBtu Henry Hub at the midpoint of guidance.

ESG Highlights:

Continued commitment to transparent reporting of Chord's environmental, social and governance ("ESG") performance; and
We remain focused on reducing GHG and methane emissions, enhancing best practices and training to minimize the likelihood of safety incidents among employees and contractors.

(1) Non-GAAP financial measure

"In 2022, our teams combined two strong Williston Basin assets to form Chord Energy, a premier E&P company committed to producing the energy needed to fuel society in a responsible manner," said Danny Brown, Chord Energy's President and Chief Executive Officer. "We closed the merger mid-year, creating an industry leader in the Williston Basin and simultaneously debuted a peer-leading return of capital program, which allows us to return a significant amount of capital to shareholders while maintaining a strong balance sheet and organizational flexibility. Pro forma return of capital to shareholders was over $1.2B in 2022 through a mix of base and variable dividend payouts, supplemented by opportunistic share repurchases." 

Danny Brown continued, "Going forward, we're committed to further enhancing the business through the capture of merger synergies, strong operating practices, and disciplined capital allocation which we believe positions us for strong shareholder returns in the future. Chord Energy has an attractive combination of strong assets, operational capability, financial discipline, a commitment to responsible operations and represents a compelling investment opportunity."

2023 Outlook

Chord constructed its 2023 plan to focus on capital efficiency and maximizing cash flow generation with a low reinvestment rate, and is running estimates at the midpoint of guidance using $75/Bbl WTI and $3.50MMBtu Henry Hub. Chord expects to generate approximately $1.75B of Adjusted EBITDA and over $825MM of Adjusted Free Cash Flow in 2023, including the impact of derivatives but excluding dividends. The 2023 reinvestment rate is expected to be approximately 50% (inclusive of the capital which shifted into 2023 due to weather delays in 4Q22). Highlights of the 2023 plan include:

• 2023 E&P and other CapEx is expected to total approximately $825MM – $865MM, including approximately $20MM of CapEx which carried over from 4Q22;
• Approximately 80% of E&P and other CapEx is expected to be invested in drilling and completions. Approximately 50% of wells turned-in-line ("TIL") in 2023 are expected to be 3-mile laterals;
• Chord plans to TIL 90 to 94 gross operated wells in 2023 with an average working interest of approximately 73%. Completions activity is concentrated in 2Q23 and 3Q23 with over two-thirds of TILs expected during these quarters. 1Q23 is expected to have approximately 11-15 back-end-weighted TILs;
• 1Q23 total volumes are impacted by January downtime and deferred activity related to severe winter weather. Volumes are expected to increase sequentially each quarter with 4Q23 volumes the highest of the year; and
• Continued focus on ESG and sustainability with Chord planning to enhance its ESG program and transparency in 2023, including publishing a sustainability report. 

Reserves

During 2022, the Company added 349.8 million barrels of oil equivalent ("MMBoe") of net proved reserves as a result of the merger with Whiting and 51.5 MMBoe of net proved reserves as a result of successful drilling in the Williston Basin. Chord's estimated net proved reserves at December 31, 2022 were 655.6 MMBoe and consisted of 381.3 million barrels ("MMBbl") of crude oil, 138.5 MMBbl of NGLs and 814.9 billion cubic feet ("Bcf") of natural gas.

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