SilverBow Resources, Inc. (NYSE:SBOW) Q3 2023 Earnings Call Transcript

Donovan Schafer: Okay. And then, as a follow up, just since you’re not including the Chesapeake acquisition, and the PDP production that would come with that in the Q4 guidance. And then, but you also do still expect it to close in the fourth quarter. Is it, I guess, it feels like this kind of almost automatically follows by logic, but I’m just trying to be thorough and double check things here. Does that mean it’s, in your view, it’s sort of safe to say, the actual Q4 results to come in above guidance. And maybe, the extent to which it’s above guidance, it’d be more so above or only slightly above kind of depending on whether it closes sooner or later. And I’m asking partly just because, optically, it would look like your Q4 guidance is below consensus. But my sense here is that that’s probably kind of because of the difference here. I’m guessing analysts are maybe factoring in those additional assets. Just want to make sure I’m thinking about all those correctly.

Sean Woolverton: No, no. Great question and your spot on with the observation. I think as we’ve given a guide of sometime in the fourth quarter, analysts have done the best with the information we provided the model when that might occur. And probably several of them probably projecting mid quarter call, or mid quarter close, with others, maybe projecting a December close. So the guide that we put out yesterday was for standalone SilverBow only. Once we do close the deal and give an update to the market on the 4Q estimate and guide, you’ll see I think a true-up with a lot of the projections that are out there. So yes, just to be clear, right now we’re out in market with just SilverBow standalone numbers, where many of the analysts covering the company have a combination of SilverBow standalone plus a partial quarter Chesapeake contribution.

But yes, and like said, once we do close, we’ll plan to give an updated guide for the adjustment for the Chesapeake assets coming into the SilverBow numbers.

Operator: And our next question comes from Noel Parks with Tuohy Brothers. Noel, go ahead.

Noel Parks: One thing that you talked a little bit about in the prepared remarks and I also saw in the release. You’re talking about Austin Chalk co-development I think in the central oil area, and I recall more past discussion about the Austin Chalk particularly in Webb County. So what’s the current thinking about the chalk that the Eagle Ford done in the oily areas now?

Sean Woolverton: Yes. Our team, over the last several years has really dug in on the Austin Chalk started in Webb County and we’ve shared a lot of that information and in a lot of our materials. But coming into this year, we had identified a couple areas that had chalk potential, primarily in our central oil area, but also in our eastern extension area. So we’ve in combination with drilling, Eagle Ford have slotted in some chalk tests at the same time. And so I think it’s on Slide 15 of our presentation, we outlined in that central oil area, a number of pads where we drilled the chalk wells on. So we brought on, I think three chalk wells in that area thus far, in all our meeting, or slightly above our expectations. So pretty excited about that.

In the eastern extension area, we brought on three chalk wells to-date. And those wells are kind of early on in their performance. So we’re still assessing those results. But I think it just points to that, hey, they’re stack pay opportunity within the basin. We have a large footprint post the Chesapeake close of nearly a quarter million acres. And what’s great about it is, we’ll continue to scour not just the Eagle Ford, but also other zones across that acreage block.