Chord Energy Corporation Reports Financial and Operating Results for Second Quarter 2023, Declares Base and Variable Dividends and Issues Updated Outlook

HOUSTON, Aug. 2, 2023 /PRNewswire/ -- Chord Energy Corporation (NASDAQ: CHRD) ("Chord", "Chord Energy" or the "Company") today reported second quarter 2023 financial and operating results. On July 1, 2022, the Company completed the merger of equals transaction between Oasis Petroleum Inc. ("Oasis") and Whiting Petroleum Corporation ("Whiting"). The results reported for the three and six months ended June 30, 2023 reflect the consolidated results of Chord, while the results reported for the three and six months ended June 30, 2022 reflect legacy Oasis, unless otherwise noted.

2Q23 Operational and Financial Highlights:

• 2Q23 oil volumes of 96.4 MBopd were at the high-end of guidance;
• Total 2Q23 volumes of 169.0 MBoepd were above the high-end of guidance;
• E&P and other CapEx was $257.0MM in 2Q23 and $459.3MM in 1H23. E&P and other CapEx in 2Q23 and 1H23 includes $10.1MM and $10.9MM, respectively, related to divested non-operated assets that will be reimbursed and was not in guidance;
• 2Q23 oil, NGL and gas revenue of $695.4MM impacted by lower realized gas and NGL pricing;
• Net cash provided by operating activities was $408.2MM and net income was $216.1MM in 2Q23;
• Adjusted EBITDA⁽¹⁾ was $369.6MM and Adjusted Free Cash Flow⁽¹⁾ was $105.3MM in 2Q23. Adjusted Free Cash Flow was reduced by the $10.1MM of E&P and other CapEx related to divested non-operated assets that will be reimbursed;
• Total return of capital for 2Q23 of $87MM was set at 75% of Adjusted Free Cash Flow⁽¹⁾, plus the $10.9MM of E&P and other CapEx incurred in 1H23 related to divested non-operated assets that will be reimbursed. Return of capital for 2Q23 includes share repurchases of $31MM during 2Q23 at a weighted average price of $147.59 per share;
• Declared a base-plus-variable cash dividend of $1.36 per share of common stock. The dividend will be payable on August 29, 2023 to shareholders of record as of August 15, 2023;
• Completed the acquisition of assets in the Williston Basin from XTO Energy Inc. and affiliates (collectively, "XTO"), subsidiaries of Exxon Mobil Corporation, for total cash consideration of $361.6MM, subject to customary post-closing adjustments;
• Announced $29MM of non-core asset sales incremental to those announced in May 2023. 2H23 volumes associated with the divested assets are approximately 0.5 MBopd. All transactions have closed or are expected to close during 3Q23. Total non-core asset sales are approximately $64MM, which includes $35MM announced in May 2023 and the $10.9MM of E&P and other CapEx incurred in 1H23 that will be reimbursed;
• ESG and sustainability initiatives progressing with a focus on continually improving safety and emissions. Sustainability report to be released in 3Q23. Chord is committed to continuous improvement across ESG and delivering the energy the world needs.

"Chord's second quarter performance benefited from strong well performance as we continue to see positive results from our three-mile lateral program," said Danny Brown, Chord Energy's President and Chief Executive Officer. "In addition, the acquisition of certain XTO assets closed at the end of the quarter and extends our inventory runway in core areas while making legacy Chord areas more capital efficient through the conversion of two-mile DSUs to three-mile DSUs. Concurrently, Chord continues to optimize its portfolio through the divestment of non-core assets. Our substantial low-cost inventory and capital efficiency support sustainable free cash generation and Chord continued to return high amounts of free cash flow to shareholders including increasing the percentage returned through share repurchases. At Chord we remain excited about the oil and gas industry, the benefits we bring to the world, and are focused on sustainable value creation through disciplined capital allocation, responsible operations, and maintaining a strong balance sheet."

2Q23 Operational and Financial Update:

The following table presents select 2Q23 operational and financial data compared to guidance released in May 2023:

During the three months ended June 30, 2023, net cash provided by operating activities was $408.2MM and net income was $216.1MM ($4.96/diluted share). Adjusted EBITDA was $369.6MM, Adjusted Free Cash Flow was $105.3MM and Adjusted Net Income was $158.4MM ($3.65/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.

Chord turned in line 22 gross (18 net) operated wells in 2Q23.

Updated Outlook:

Chord is updating its outlook to reflect its latest projections, including the impact of the acquisition of assets in the Williston Basin from XTO, which closed June 30, 2023, and additional non-core divestitures which closed in 2Q23 or are expected to close in 3Q23. Assuming pricing of $75/Bbl WTI and $2.75/MMBtu Henry Hub for the remainder of 2023, Chord expects to generate approximately $1.7B of Adjusted EBITDA and approximately $735MM of Adjusted Free Cash Flow in 2023, including the impact of derivatives but excluding dividends. The reinvestment rate is expected to be approximately 50% in 2H23. Changes to the Company's outlook since May 2023 include:

• Updating volume projections to account for the latest development schedule and the production impact from the acquisition and non-core divestitures in 1H23. Excluding the impacts of acquisitions and divestitures, FY23 oil volumes are in-line with May guidance;
• Lowering NGL realizations and residue gas realizations to account for current market prices versus WTI. Current guidance assumes elevated levels of ethane rejection;
• GPT per BOE adjusted to reflect the conversion of a marketing agreement from a sales contract to a transportation contract;
• Increasing production tax as a percentage of revenue to reflect an escalation of the North Dakota gas extraction tax effective in July; and
• FY23 E&P and other CapEx increasing to $850MM – $880MM, which excludes the $10.9MM of E&P and other CapEx incurred in 1H23 related to divested non-operated assets that will be reimbursed. E&P and other CapEx was increased to reflect incremental 4Q23 activity associated with the acquisition of assets in the Williston Basin from XTO.

The following table presents select operational and financial guidance for 3Q23 and FY23:

Chord expects cash taxes to range between 0% – 10% of Adjusted EBITDA in 2H23 with NYMEX WTI between $70/Bbl – $90/Bbl.

Select Operational and Financial Data:

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

Capital Expenditures:

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

Dividend Declaration:

Chord declared a base-plus-variable cash dividend of $1.36 per share of common stock. The dividend will be payable on August 29, 2023 to shareholders of record as of August 15, 2023. The base-plus-variable dividend was declared in connection with Chord's return of capital plan. Additional 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.

Balance Sheet and Liquidity:

The following table presents key balance sheet data and liquidity metrics as of June 30, 2023 (in millions):

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, included in this press release 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 merger, future opportunities for Chord, future financial performance and condition, guidance and statements regarding Chord's expectations, beliefs, plans, objectives, assumptions or future events or performance are forward-looking statements. The words "anticipate," "ensure," "expect," "if," "intend," "estimate," "probable," "project," "forecasts," "predict," "outlook," "aim," "will," "could," "should," "would," "potential," "may," "might," "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 merger.

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 business 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 merger in the timeframe expected or at all, changes in crude oil, NGL and natural gas prices, war and political instability in Ukraine and the effect on commodity prices due to the ongoing conflict in Ukraine, 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 Reports on Form 10-K, for the year ended December 31, 2022, 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 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.