Mid-Con Energy Partners, LP (NASDAQ:MCEP) Q1 2019 Results Conference Call May 3, 2019 9:00 AM ET
Jeff Olmstead - President, Chief Executive Officer
Sherry Morgan - Chief Accounting Officer
Chad McLawhorn - General Counsel
Philip Houchin - Chief Financial Officer
Randy Olmstead - Executive Chairman
Good morning, ladies and gentlemen, and welcome to the Mid-Con Energy Partners, LP First Quarter 2019 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct a question and answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference call is being recorded.
I would now like to turn the conference over to your host, Mr. Jeff Olmstead. Please go ahead, sir.
Thank you, Tiffany. Good morning. Thank you, everyone, for your participation on the call today. Before we get started, I would like to remind you that today's call will include forward-looking statements related to future and not past events within the meaning of the federal securities laws. These forward-looking statements are based on our current expectations and include any statement that is not directly related to our current or historical facts. For further explanation, please refer to our SEC filings.
Joining me on the call today are Sherry Morgan, our Chief Accounting Officer; Chad McLawhorn, our General Counsel; Philip Houchin, our CFO; and Randy Olmstead, our Executive Chairman.
Last night, we posted our earnings release and 10-Q for the quarter ending March 31, 2019. Production and EBITDA for the quarter came in at the low end of our guidance range due to a number of factors that we believe are onetime in nature. Realized pricing in January and February had the largest effect as our wellhead prices were lower than normal, which resulted in our temporarily shutting in almost a 100 wells across our portfolio due to poor economics.
LOE was slightly higher than expected due to greater than normal repairs from winter weather issues, and G&A expenses were significantly higher than normal due to recent A&D activities. On a positive note, most of this abnormal activity had subsided by March and realized pricing, lease operating expenses and production went back to more historical and expected levels. Highlighting the quarter was the closing of our recently announced strategic transaction on March 28. The transaction allowed us to reduce the outstanding debt by $25 million during the quarter, resulting in a debt-to-EBITDA of 3.35 times as calculated by our credit agreement.
Along with this transaction, we reset our borrowing base to $110 million, providing us with $41 million in availability at the quarter end, and production from the new assets is already exceeding expectations. Post transaction, the partnership now has a portfolio of assets that has an underlying decline rate of less than 5%. This provides us with more stable platform for growth as less capital is required to maintain the existing asset base, and this provides us flexibility to allocate our free cash flow to the most efficient use between organic development, acquisition opportunities and debt repayment.
I want to thank our team for doing an exceptional job of getting all of these transactions executed in a timely manner and for managing through a couple of months of abnormal pricing. We're excited where the first quarter ended and where the second quarter has already begun and look forward to providing updates as we continue to assimilate and develop these new assets.
With that, Tiffany, we'll open up to questions.
Okay. Well, again, I appreciate everyone who's listening in or may listen to this later. Again, we've definitely transformed the partnership with the strategic transaction in March. Things were going, from an expectation standpoint, a little better than expectations, and we look forward to speaking to you all at the end of the second quarter. Thank you.
Ladies and gentlemen, this concludes today's conference call. Thank you for your participation, and have a wonderful day. You may all disconnect.