HighPeak Energy, Inc. (NASDAQ:HPK) Q1 2024 Earnings Call Transcript

From a modeling standpoint, I would probably look at current kind of [$6.50] to $7 all in with work over per BOE is a good number for the rest of the year. And I think if you do that, you’ll be pretty close.

Nicholas Pope: That’s very, very helpful and detailed. Kind of tacking onto that a little bit, natural gas volumes for the quarter saw a nice uptick. I know that’s a little bit more third-party, the processing and the movement of the gas. Maybe could you talk just a little bit about going forward, I mean, do you all expect that gas offtake, gas processing is pretty much caught up with where you would need it to be in the near future right now?

Jack Hightower: You bet, Nick. And to kind of clarify that question maybe a little bit, over the last couple of quarters, our percent oil has come down maybe a percentage or so. But again, if you look at our reserve report that’s in the presentation and that’s for the economic life of all of the wells that we add on by the end of 2023. And the economic life of these wells are 78% oil. Today, we’re running 80. So if you look into the future, obviously, we’re going to try to maximize the selling of any gas that we produce and it’s very rich gas. So on a gas and liquids combination, we’re somewhere in the $6 to $7 in MCF. So we are highly incentivized to get all of that gas into the pipeline and sold. But if you’re looking forward to see what may change over the next kind of 10-year period, might you go from 80% to 79% over 10 years?

Yes. And then over the next 10, will it level off at about that 78? I think that’s a very reasonable expectation. So we will stay extremely liquids-rich and oily. Again, that’s what drives our economics, drives our margins, and helps with our breakeven costs.

Nicholas Pope: Got it. It’s all very helpful. Appreciate it, Mike. Thanks, team.

Jack Hightower: Thank you.

Operator: Thank you. I’m showing no further questions at this time. Thank you for your participation in today’s conference. This does conclude the program. You may now disconnect.