Rex Energy Corporation (Nasdaq:REXX) today announced its second
quarter 2016 operational and financial results.
Second Quarter Financial
Results
Unless otherwise noted, results of continuing
operations are presented excluding the results of the company’s
Illinois Basin assets, which have been classified as discontinued
operations, for all periods presented.
Operating revenue from continuing operations for
the three and six months ended June 30, 2016 was $31.3 million and
$57.0 million, respectively, which represents a decrease of 13% and
30% over the same periods in 2015, respectively. Commodity
revenues, including settlements from derivatives, for the three and
six months ended June 30, 2016 were $48.7 million and $87.5
million, a decrease of 1% and 17% for the same periods in 2015.
Commodity revenues from condensate and natural gas liquids (NGLs),
including settlements from derivatives, represented 37% of total
commodity revenues for the three months ended June 30, 2016.
Lease operating expense (LOE) from continuing
operations was $25.2 million, or $1.39 per Mcfe for the quarter.
For the six months ended June 30, 2016, LOE was approximately $49.7
million, or $1.40 per Mcfe. General and administrative expenses
from continuing operations were $4.8 million for the second quarter
of 2016, a 35% decrease on a per unit basis as compared to the same
period in 2015. Cash general and administrative expenses from
continuing operations, a non-GAAP measure, were $3.7 million for
the second quarter of 2016, a 36% decrease on a per unit basis as
compared to the same period in 2015. For the six months ended June
30, 2016, G&A expenses from continuing operations were $10.1
million, a 36% decrease on a per unit basis as compared to the same
period in 2015. Cash G&A expenses from continuing operations
were $9.1 million, a 19% decrease on a per unit basis as compared
to the same period in 2015.
Net income attributable to common shareholders for
the three months ended June 30, 2016 was $16.0 million, or $0.22
per basic share. Net loss attributable to common shareholders for
the six months ended June 30, 2016 was $46.2 million, or $0.72 per
basic share. Adjusted net loss, a non-GAAP measure, for the three
months ended June 30, 2016 was $4.8 million, or $0.07 per share.
Adjusted net loss for the six months ended June 30, 2016 was $17.5
million, or $0.27 per share. During the second quarter of 2016, the
company converted approximately $84.0 million in face value of its
Series A 6.00% Convertible Perpetual Preferred Stock which
generated approximately $72.3 million of income attributable to
common shareholders.
EBITDAX from continuing operations, a non-GAAP
measure, was $19.0 million for the second quarter of 2016 and $27.5
million for the six months ended June 30, 2016.
Reconciliations of adjusted net income to GAAP net
income, EBITDAX to GAAP net income and G&A to cash G&A for
the three months and six months ended June 30, 2016, as well as a
discussion of the uses of each measure, are presented in the
appendix of this release.
Production Results and Price
Realizations
Second quarter 2016 production volumes from
continuing operations were 199.1 MMcfe/d, an increase of 2% over
the second quarter of 2015, consisting of 124.5 MMcf/d of natural
gas and 12.4 Mboe/d of condensate and NGLs (including 5.9 Mboe/d of
ethane). Condensate and NGLs (including ethane) accounted for 37%
of net production for the second quarter of 2016.
Including the effects of cash-settled derivatives,
realized prices for the three months ended June 30, 2016 were $2.73
per Mcf for natural gas, $40.62 per barrel for condensate, $19.93
per barrel for NGLs (C3+) and $7.49 per barrel for ethane. Before
the effects of hedging, realized prices for the three months ended
June 30, 2016 were $1.42 per Mcf for natural gas, $37.20 per barrel
for condensate, $15.49 per barrel for NGLs (C3+) and $7.49 per
barrel for ethane. During the second quarter of 2016, the company
liquidated a number of NGL and natural gas derivative positions
which resulted in approximately $2.2 million of additional proceeds
during the quarter. Excluding the effect of these liquidations,
realized prices for natural gas and C3+ NGLs would have been
approximately $2.37 per Mcf and $21.89 per barrel,
respectively.
Including the effects of cash-settled derivatives,
realized prices for the six months ended June 30, 2016 were $2.41
per Mcf for natural gas, $45.57 per barrel for condensate, $19.10
per barrel for NGLs (C3+) and $6.98 per barrel for ethane. Before
the effects of hedging, realized prices for the six months ended
June 30, 2016 were $1.39 per Mcf for natural gas, $31.91 per barrel
for condensate, $13.87 per barrel for NGLs (C3+) and $6.84 per
barrel for ethane.
Second Quarter 2016 Capital
Investments
For the second quarter of 2016, net operational
capital investments were approximately $23.3 million. The company
expects to be reimbursed by joint venture partners for
approximately $11.0 million for costs incurred during the second
quarter that were not billed until the third quarter. These capital
investments funded the drilling of eight gross (3.5 net) wells,
fracture stimulation of four gross (1.4 net) wells, placing three
gross (1.1 net) wells into sales and other projects related to
drilling and completing wells in the Appalachian Basin.
Second quarter investments for leasing and property
acquisition were $0.6 million and capitalized interest was $0.3
million.
Operational Update
Appalachian Basin – Legacy Butler Operated Area
The company has completed and recently placed into
sales the two-well Geyer pad. The Geyer wells were drilled to an
average lateral length of approximately 4,200 feet and were
completed in an average of 24 stages. The company plans to provide
an update on the Geyer wells in the third quarter of 2016.
Appalachian Basin – Moraine East Area
In the Moraine East Area, Rex Energy drilled five
gross (1.8 net) wells during the second quarter of 2016. In
addition, the company has five gross (1.8 net) wells awaiting
completion and four gross (2.0 net) wells completed and waiting to
be placed into sales. The company did not place the four-well
Fleeger II pad into sales during the second quarter, as was
previously expected. During the second quarter, the company
experienced delays in the start-up of the Fleeger II gathering line
and the commissioning of the high pressure system in Moraine East.
The commissioning of the high pressure system is now expected in
mid-September and the Fleeger II pad is expected to be placed into
sales in mid-October.
During the second quarter of 2016, the company
completed the drilling of the two-well Klever pad. The Klever wells
were drilled to an average lateral length of approximately 7,460
feet and are expected to be placed into sales in the fourth quarter
of 2016. The company has also completed the drilling of the
four-well Baird pad with an average lateral length of approximately
7,140 feet and the pad is expected to be placed into sales in the
fourth quarter of 2016. Top-hole drilling has commenced on the
six-well Shields pad, which is expected to have an average lateral
length of approximately 7,750 feet. Horizontal drilling will begin
on the Shields pad once the horizontal drilling rig returns from
the Warrior North Prospect.
At the end of the third quarter of 2016, the
company expects to have HBP or HBO approximately 25,000 gross
acres, which is 63% of its goal of 40,000 gross acres HBP or HBO in
the Moraine East Area.
Appalachian Basin – Warrior North Area – Carroll
County, Ohio
In the Warrior North Area, Rex Energy placed the
three-well Goebeler pad into sales during the second quarter. The
Goebeler wells were drilled to an average lateral length of
approximately 7,360 feet and completed in an average of 41 stages
with average sand concentrations of 2,800 pounds per foot. The
wells produced at an average 24-hour sales rate per well, assuming
full ethane recovery, of 2.1 MBoe/d, consisting of 3.5 MMcf/d of
natural gas, 801 bbls/d of NGLs and 704 bbls/d of condensate.
The company also placed into sales the two-well
Perry pad. The Perry pad was drilled to an average lateral length
of approximately 6,350 feet with an average of 36 completion
stages. An update on the Perry pad will be provided during the
third quarter of 2016. The four-well Vaughn pad is currently being
drilled with an expected average lateral length of approximately
7,200 feet, with the four well pad expected to be placed into sales
in the first quarter of 2017.
Liquidity Update
As previously announced, Rex Energy entered into a
purchase and sale agreement for the sale of the company’s entire
interest in its Illinois Basin asset. Proceeds from the sale are
expected to be approximately $40 million with the potential for
additional proceeds of up to an additional $10 million over the
next three years. In addition, on July 1, 2016 the company’s bank
group reaffirmed the existing $190 million borrowing base,
inclusive of the sale of the Illinois Basin asset. The company
recently entered into an exchange agreement with a certain holder
for the exchange of $43.5 million aggregate principal amount of the
company’s 1.00%/8.00% Senior Secured Second Lien Notes due 2020 for
approximately 16.8 million shares of common stock. Total cash
interest savings from the exchange are approximately $11.1 million
over the original life of the notes. Debt retirements in 2016 now
total approximately $72.6 million with over $22.0 million in cash
interest savings over the original life of the notes. The company
continues to explore additional enhancements to its overall balance
sheet.
Third Quarter and Full Year 2016
Guidance
Rex Energy is providing its guidance for the third
quarter of 2016 ($ in millions) and updating its full year 2016
guidance. All figures are presented as net to the company. Third
quarter production is expected to be down approximately 3% at the
midpoint of guidance due to the delay in placing the Fleeger II pad
into sales, the delay in the commissioning of the Moraine East
high pressure system and the four day shut-in of the Moraine East
Area related to the commissioning of the high pressure system. For
full year 2016, adjusting for the sale of the Illinois Basin asset
and the delay in the Fleeger II gathering line, the company expects
full-year production growth of approximately 5%. In addition, with
approximately 10 wells expected to be placed into sales in the
fourth quarter of 2016, the company expects December 2016 exit rate
year over year growth of approximately 7%, or 13.4 MMcfe/d.
|
|
3Q2016 |
Full Year 2016 |
|
Production |
190.0 – 195.0 MMcfe/d |
-- |
|
Lease Operating Expense |
$24.5 - $26.5 million |
-- |
|
Cash G&A |
$3.7 - $4.7 million |
-- |
|
Net Operational Capital Expenditures(1) |
-- |
$35.5 million |
| (1) Land acquisition expense and capitalized interest are not
included in the operational capital expenditures budget |
Conference Call Information
Management will host a live conference call and
webcast on Wednesday, August 3, 2016 at 10:00 a.m. Eastern to
review second quarter 2016 financial results and operational
highlights. The telephone number to access the conference call is
(866) 437-1772.
About Rex Energy Corporation
Headquartered in State College, Pennsylvania, Rex
Energy is an independent oil and gas exploration and production
company with its core operations in the Appalachian Basin. The
company’s strategy is to pursue its higher potential exploration
drilling prospects while acquiring oil and natural gas properties
complementary to its portfolio.
Forward-Looking Statements
Except for historical information, statements made
in this release, including those relating to the timing and nature
of development plans; drilling and completion schedules;
anticipated fracture stimulation activities; expected dates for
placement of wells into sales; and our financial guidance for third
quarter and full year 2016 are 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. Forward-looking statements may contain words such as
"expected", "expects", "scheduled", "planned", "plans",
"anticipates" or similar words, and are based on management's
experience and perception of historical trends, current conditions,
and anticipated future developments, as well as other factors
believed to be appropriate. We believe these statements and the
assumptions and estimates contained in this release are reasonable
based on information that is currently available to us. However,
management's assumptions and the company's future performance are
subject to a wide range of business risks and uncertainties, both
known and unknown, and we cannot assure that the company can or
will meet the goals, expectations, and projections included in this
release. Any number of factors could cause our actual results to be
materially different from those expressed or implied in our forward
looking statements, including (without limitation):
- volatility in oil, NGL, and natural gas pricing;
- domestic and global demand for oil, NGLs and natural gas;
- economic conditions in the United States and globally;
- the adequacy and availability of capital resources, credit, and
liquidity including, but not limited to, access to additional
borrowing capacity;
- conditions in the domestic and global capital and credit
markets and their effect on us;
- new or changing government regulations, including those
relating to environmental matters, permitting, or other aspects of
our operations;
- the geologic quality of the company's properties with regard
to, among other things, the existence of hydrocarbons in economic
quantities;
- uncertainties inherent in the estimates of our oil and natural
gas reserves;
- our ability to increase oil and natural gas production and
income through exploration and development;
- drilling and operating risks;
- the success of our drilling techniques in both conventional and
unconventional reservoirs;
- the success of the secondary and tertiary recovery methods we
utilize or plan to employ in the future;
- the number of potential well locations to be drilled, the cost
to drill them, and the time frame within which they will be
drilled;
- the ability of contractors to timely and adequately perform
their drilling, construction, well stimulation, completion and
production services;
- the availability of equipment, such as drilling rigs, and
infrastructure, such as transportation, pipelines, processing and
midstream services;
- the effects of adverse weather or other natural disasters on
our operations;
- competition in the oil and gas industry in general, and
specifically in our areas of operations;
- changes in our drilling plans and related budgets;
- the success of prospect development and property
acquisition;
- the success of our business and financial strategies, and
hedging strategies; and
- uncertainties related to the legal and regulatory environment
for our industry, and our own legal proceedings and their
outcome.
We undertake no obligation to publicly update or
revise any forward-looking statements. Further information on the
company's risks and uncertainties is available in our filings with
the Securities and Exchange Commission and we strongly encourage
investors to review those filings.
| |
| REX ENERGY CORPORATION |
| CONSOLIDATED BALANCE SHEETS |
| ($ in Thousands, Except Share and Per Share
Data) |
| |
|
ASSETS |
June 30,
2016(Unaudited) |
|
December 31, 2015 |
|
Current Assets |
|
|
|
| Cash and Cash Equivalents |
$ |
3,438 |
|
|
$ |
|
|
1,091 |
|
| Accounts Receivable |
|
|
31,644 |
|
|
|
|
17,274 |
|
| Taxes Receivable |
|
|
48 |
|
|
|
|
18 |
|
| Short-Term Derivative
Instruments |
|
|
4,760 |
|
|
|
|
34,260 |
|
| Inventory, Prepaid Expenses and
Other |
|
|
1,688 |
|
|
|
|
3,059 |
|
| Assets Held for Sale |
|
|
46,549 |
|
|
|
|
60,451 |
|
| Total Current
Assets |
|
|
88,127 |
|
|
|
|
116,153 |
|
|
Property and Equipment (Successful Efforts
Method) |
|
|
|
| Evaluated Oil and Gas
Properties |
|
|
1,020,936 |
|
|
|
|
943,092 |
|
| Unevaluated Oil and Gas
Properties |
|
|
232,674 |
|
|
|
|
262,992 |
|
| Other Property and Equipment |
|
|
21,444 |
|
|
|
|
20,363 |
|
| Wells and Facilities in
Progress |
|
|
75,992 |
|
|
|
|
141,100 |
|
| Pipelines |
|
|
14,144 |
|
|
|
|
14,024 |
|
| Total Property and
Equipment |
|
|
1,365,190 |
|
|
|
|
1,381,571 |
|
| Less: Accumulated Depreciation ,
Depletion and Amortization |
|
|
(459,427 |
) |
|
|
|
(437,828 |
) |
| Net Property and
Equipment |
|
|
905,763 |
|
|
|
|
943,743 |
|
| Other Assets |
|
|
2,490 |
|
|
|
|
2,501 |
|
| Long-Term Derivative
Instruments |
|
|
1,526 |
|
|
|
|
9,534 |
|
|
Total Assets |
$ |
|
|
997,906 |
|
|
$ |
|
|
1,071,931 |
|
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Accounts Payable |
$ |
|
|
51,915 |
|
|
$ |
|
|
36,785 |
|
| Current Maturities of Long-Term
Debt |
|
|
172 |
|
|
|
|
402 |
|
| Accrued Liabilities |
|
|
30,346 |
|
|
|
|
40,608 |
|
| Short-Term Derivative
Instruments |
|
|
15,902 |
|
|
|
|
2,486 |
|
| Liabilities Related to Assets Held
for Sale |
|
|
39,935 |
|
|
|
|
36,320 |
|
| Total Current
Liabilities |
|
|
138,270 |
|
|
|
|
116,601 |
|
| Long-Term Derivative
Instruments |
|
|
10,091 |
|
|
|
|
5,556 |
|
| Senior Secured Line of Credit and
Long-Term Debt, Net of Issuance Costs |
|
|
141,237 |
|
|
|
|
109,386 |
|
| Senior Notes, Net of Issuance
Costs |
|
|
637,314 |
|
|
|
|
663,089 |
|
| Premium on Senior Notes, Net |
|
|
1,524 |
|
|
|
|
2,344 |
|
| Other Deposits and Liabilities |
|
|
2,860 |
|
|
|
|
3,156 |
|
| Future Abandonment Cost |
|
|
7,731 |
|
|
|
|
11,568 |
|
|
Total Liabilities |
$ |
|
|
939,027 |
|
|
$ |
|
|
911,700 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholder Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Preferred Stock, $.001 par value
per share, 100,000 shares authorized and 4,087 issued and
outstanding on June 30, 2016 and 16,100 shares issued and
outstanding on December 31, 2015 |
$ |
|
|
1 |
|
|
$ |
|
|
1 |
|
| Common Stock, $.001 par value per
share, 200,000,000 shares authorized and 78,440,589 shares issued
and outstanding on June 30, 2016 and 55,741,229 shares issued and
outstanding on December 31, 2015 |
|
|
77 |
|
|
|
|
54 |
|
| Additional Paid-In Capital |
|
|
637,223 |
|
|
|
|
623,863 |
|
| Accumulated Deficit |
|
|
(578,422 |
) |
|
|
|
(463,687 |
) |
| Total Stockholders’
Equity |
|
|
58,879 |
|
|
|
|
160,231 |
|
|
Total Liabilities and Owners’ Equity |
$ |
|
|
997,906 |
|
|
$ |
|
|
1,071,931 |
|
| |
| |
| REX ENERGY CORPORATION |
| CONSOLIDATED STATEMENTS OF OPERATIONS |
| (Unaudited, in Thousands, Except per Share
Data) |
| |
| |
For the Three Months Ended June 30, |
|
For the Six Months EndedJune
30, |
| |
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
|
OPERATING REVENUE |
|
|
|
|
|
|
|
|
Natural Gas, Condensate and NGL Sales |
$ |
31,271 |
|
|
$ |
|
35,772 |
|
|
$ |
|
56,944 |
|
|
$ |
|
81,696 |
|
|
Other Revenue |
|
(6 |
) |
|
|
12 |
|
|
|
7 |
|
|
|
22 |
|
| TOTAL OPERATING
REVENUE |
|
31,265 |
|
|
|
35,784 |
|
|
|
56,951 |
|
|
|
81,718 |
|
|
OPERATING EXPENSES |
|
|
|
|
|
|
|
|
Production and Lease Operating Expense |
|
25,221 |
|
|
|
24,270 |
|
|
|
49,672 |
|
|
|
47,387 |
|
|
General and Administrative Expense |
|
4,837 |
|
|
|
7,394 |
|
|
|
10,121 |
|
|
|
15,745 |
|
| Gain
on Disposal of Assets |
|
(4,307 |
) |
|
|
(373 |
) |
|
|
(4,295 |
) |
|
|
(309 |
) |
|
Impairment Expense |
|
25,139 |
|
|
|
117,839 |
|
|
|
35,780 |
|
|
|
124,687 |
|
|
Exploration Expense |
|
803 |
|
|
|
755 |
|
|
|
1,738 |
|
|
|
1,194 |
|
|
Depreciation, Depletion, Amortization and Accretion |
|
14,750 |
|
|
|
24,698 |
|
|
|
31,262 |
|
|
|
46,537 |
|
|
Other Operating Expense (Income) |
|
704 |
|
|
|
(66 |
) |
|
|
1,030 |
|
|
|
5,138 |
|
| TOTAL OPERATING
EXPENSES |
|
67,147 |
|
|
|
174,517 |
|
|
|
125,308 |
|
|
|
240,379 |
|
| LOSS FROM
OPERATIONS |
|
(35,882 |
) |
|
|
(138,733 |
) |
|
|
(68,357 |
) |
|
|
(158,661 |
) |
|
OTHER EXPENSE |
|
|
|
|
|
|
|
|
Interest Expense |
|
(11,439 |
) |
|
|
(12,181 |
) |
|
|
(24,469 |
) |
|
|
(24,193 |
) |
| Gain
(Loss) on Derivatives, Net |
|
(29,169 |
) |
|
|
(281 |
) |
|
|
(25,120 |
) |
|
|
16,838 |
|
|
Other Income |
|
12 |
|
|
|
61 |
|
|
|
12 |
|
|
|
92 |
|
| Debt
Exchange Expense |
|
(533 |
) |
|
|
|
|
-- |
|
|
|
(9,014 |
) |
|
|
|
|
-- |
|
| Gain
on Extinguishment of Debt |
|
23,707 |
|
|
|
|
|
-- |
|
|
|
23,707 |
|
|
|
|
|
-- |
|
| Loss
on Equity Method Investments |
|
|
-- |
|
|
|
(208 |
) |
|
|
|
|
-- |
|
|
|
(411 |
) |
| TOTAL OTHER
EXPENSE |
|
(17,422 |
) |
|
|
(12,609 |
) |
|
|
(34,884 |
) |
|
|
(7,674 |
) |
|
LOSS FROM CONTINUING OPERATIONS BEFORE INCOME
TAX |
|
(53,304 |
) |
|
|
(151,342 |
) |
|
|
(103,241 |
) |
|
|
(166,335 |
) |
|
Income Tax (Expense) Benefit |
|
393 |
|
|
|
|
|
-- |
|
|
|
(2,321 |
) |
|
|
|
|
-- |
|
| NET
LOSS FROM CONTINUING OPERATIONS |
|
(52,911 |
) |
|
|
(151,342 |
) |
|
|
(105,562 |
) |
|
|
(166,335 |
) |
| Loss From
Discontinued Operations, Net of Income Taxes |
|
(1,683 |
) |
|
|
(461 |
) |
|
|
(9,173 |
) |
|
|
(1,985 |
) |
| NET
LOSS |
|
(54,594 |
) |
|
|
(151,803 |
) |
|
|
(114,735 |
) |
|
|
(168,320 |
) |
| Net Income
Attributable to Noncontrolling Interests |
|
|
-- |
|
|
|
949 |
|
|
|
|
|
-- |
|
|
|
2,246 |
|
|
NET LOSS ATTRIBUTABLE TO REX ENERGY |
|
(54,594 |
) |
|
|
(152,752 |
) |
|
|
(114,735 |
) |
|
|
(170,566 |
) |
|
Preferred Stock Dividends |
|
(1,723 |
) |
|
|
(2,415 |
) |
|
|
(3,828 |
) |
|
|
(4,830 |
) |
| Effect
of Preferred Stock Conversion |
|
72,316 |
|
|
|
|
|
— |
|
|
|
72,316 |
|
|
|
|
|
— |
|
|
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON
SHAREHOLDERS |
$ |
15,999 |
|
|
$ |
|
(155,167 |
) |
|
$ |
|
(46,247 |
) |
|
$ |
|
(175,396 |
) |
| Earnings
per common share: |
|
|
|
|
|
|
|
| Basic –
Net Income (Loss) From Continuing Operations Attributable to Rex
Energy Common Shareholders |
$ |
0.24 |
|
|
$ |
|
(2.84 |
) |
|
$ |
|
(0.58 |
) |
|
$ |
|
(3.16 |
) |
| Basic –
Net Loss From Discontinued Operations Attributable to Rex Energy
Common Shareholders |
|
(0.02 |
) |
|
|
(0.03 |
) |
|
|
(0.14 |
) |
|
|
(0.08 |
) |
| Basic –
Net Income (Loss) Attributable to Rex Energy Common
Shareholders |
$ |
0.22 |
|
|
$ |
|
(2.87 |
) |
|
$ |
|
(0.72 |
) |
|
$ |
|
(3.24 |
) |
| Basic –
Weighted Average Shares of Common Stock Outstanding |
|
71,804 |
|
|
|
54,118 |
|
|
|
64,044 |
|
|
|
54,090 |
|
| Diluted
– Net Income (Loss) From Continuing Operations Attributable to Rex
Energy Common Shareholders |
$ |
0.24 |
|
|
$ |
|
(2.84 |
) |
|
$ |
|
(0.58 |
) |
|
$ |
|
(3.16 |
) |
| Diluted
– Net Loss From Discontinued Operations Attributable to Rex
Energy Common Shareholders |
|
(0.02 |
) |
|
|
(0.03 |
) |
|
|
(0.14 |
) |
|
|
(0.08 |
) |
| Diluted
– Net Income (Loss) Attributable to Rex Energy Common
Shareholders |
$ |
0.22 |
|
|
$ |
|
(2.87 |
) |
|
$ |
|
(0.72 |
) |
|
$ |
|
(3.24 |
) |
| Diluted
– Weighted Average Shares of Common Stock Outstanding |
|
71,804 |
|
|
|
54,118 |
|
|
|
64,044 |
|
|
|
54,090 |
|
| |
| |
| REX ENERGY CORPORATION |
| CONSOLIDATED OPERATIONAL HIGHLIGHTS |
| UNAUDITED |
| |
|
|
|
Three Months Ending |
|
Six Months Ending |
|
|
|
June 30, |
|
June 30, |
|
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
| Oil,
Natural Gas, NGL and Ethane sales (in thousands): |
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural gas sales |
|
$ |
16,044 |
|
$ |
21,087 |
|
$ |
31,560 |
|
$ |
49,373 |
|
Condensate sales |
|
|
3,369 |
|
|
5,146 |
|
|
4,902 |
|
|
9,421 |
|
Natural gas liquids (C3+) sales |
|
|
7,867 |
|
|
7,684 |
|
|
13,843 |
|
|
19,803 |
|
Ethane sales |
|
|
3,991 |
|
|
1,855 |
|
|
6,639 |
|
|
3,099 |
|
Cash-settled derivatives: |
|
|
|
|
|
|
|
|
|
|
|
|
| Natural gas |
|
|
14,857 |
|
|
9,067 |
|
|
23,080 |
|
|
14,339 |
| Condensate |
|
|
310 |
|
|
2,368 |
|
|
2,098 |
|
|
6,113 |
| Natural gas liquids
(C3+) |
|
|
2,255 |
|
|
2,036 |
|
|
5,211 |
|
|
3,539 |
| Ethane |
|
|
-- |
|
|
67 |
|
|
144 |
|
|
126 |
| Total
oil, gas, NGL and Ethane sales including cash settled
derivatives |
|
$ |
48,693 |
|
$ |
49,310 |
|
$ |
87,477 |
|
$ |
105,813 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production during the period: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural gas (Mcf) |
|
|
11,327,101 |
|
|
11,926,165 |
|
|
22,631,620 |
|
|
23,429,082 |
|
Condensate (Bbls) |
|
|
90,565 |
|
|
124,381 |
|
|
153,628 |
|
|
259,738 |
|
Natural gas liquids (C3+) (Bbls) |
|
|
507,990 |
|
|
551,899 |
|
|
997,744 |
|
|
1,073,102 |
|
Ethane (Bbls) |
|
|
532,928 |
|
|
290,453 |
|
|
971,140 |
|
|
479,608 |
| Total (Mcfe)1 |
|
|
18,115,999 |
|
|
17,726,563 |
|
|
35,366,692 |
|
|
34,303,770 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production – average per day: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural gas (Mcf) |
|
|
124,474 |
|
|
131,057 |
|
|
124,350 |
|
|
129,442 |
|
Condensate (Bbls) |
|
|
995 |
|
|
1,367 |
|
|
844 |
|
|
1,435 |
|
Natural gas liquids (C3+) (Bbls) |
|
|
5,582 |
|
|
6,065 |
|
|
5,482 |
|
|
5,929 |
|
Ethane (Bbls) |
|
|
5,856 |
|
|
3,192 |
|
|
5,336 |
|
|
2,650 |
| Total (Mcfe)1 |
|
|
199,077 |
|
|
194,801 |
|
|
194,322 |
|
|
189,526 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Average
price per unit: |
|
|
|
|
|
|
|
|
|
|
|
|
| Realized natural gas price per Mcf
– as reported |
|
$ |
1.42 |
|
$ |
1.77 |
|
$ |
1.39 |
|
$ |
2.11 |
| Realized impact from cash settled
derivatives per Mcf2 |
|
|
1.31 |
|
|
0.76 |
|
|
1.02 |
|
|
0.61 |
| Net realized price per Mcf |
|
$ |
2.73 |
|
$ |
2.53 |
|
$ |
2.41 |
|
$ |
2.72 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Realized
condensate price per Bbl – as reported |
|
$ |
37.20 |
|
$ |
41.37 |
|
$ |
31.91 |
|
$ |
36.27 |
| Realized impact from cash settled
derivatives per Bbl3 |
|
|
3.42 |
|
|
19.04 |
|
|
13.66 |
|
|
23.54 |
| Net realized price per Bbl |
|
$ |
40.62 |
|
$ |
60.41 |
|
$ |
45.57 |
|
$ |
59.81 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Realized
natural gas liquids (C3+) price per Bbl – as reported |
|
$ |
15.49 |
|
$ |
13.92 |
|
$ |
13.87 |
|
$ |
18.45 |
| Realized impact from cash settled
derivatives per Bbl4 |
|
|
4.44 |
|
|
3.69 |
|
|
5.23 |
|
|
3.30 |
| Net realized price per Bbl |
|
$ |
19.93 |
|
$ |
17.61 |
|
$ |
19.10 |
|
$ |
21.75 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Realized
ethane price per Bbl – as reported |
|
$ |
7.49 |
|
$ |
6.39 |
|
$ |
6.84 |
|
$ |
6.46 |
| Realized impact from cash settled
derivatives per Bbl |
|
|
-- |
|
|
0.23 |
|
|
0.14 |
|
|
0.26 |
| Net realized price per Bbl |
|
$ |
7.49 |
|
$ |
6.62 |
|
$ |
6.98 |
|
$ |
6.72 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LOE/Mcfe |
|
$ |
1.39 |
|
$ |
1.37 |
|
$ |
1.40 |
|
$ |
1.38 |
| Cash
G&A/Mcfe |
|
$ |
0.20 |
|
$ |
0.32 |
|
$ |
0.26 |
|
$ |
0.32 |
| 1 Oil and natural gas liquids are converted at the rate of one
barrel of oil equivalent to six Mcfe. |
| 2 For the three and six months ended June 30, 2016, the
company liquidated natural gas derivatives that totaled
approximately $4.0 million in additional proceeds than what would
have normally been received. |
| 3 Includes the effect of derivatives not classified as
discontinued operations. When including the effect of Illinois
Basin production, derivatives realized increased prices by
$1.15/bbl, $7.71/bbl, $6.73/bbl and $14.90/bbl for the three month
periods ended June 30, 2016 and 2015 and the six month periods
ended June 30, 2016 and 2015, respectively. |
| 4 For the three and six months ended June 30, 2016, the
company liquidated C3+ NGL derivatives that totaled approximately
$1.0 million less in proceeds than what would have normally been
received. |
| |
| |
| REX ENERGY CORPORATION |
| COMMODITY DERIVATIVES – HEDGE POSITION AS OF
8/1/2016 |
| |
|
|
|
|
2016 |
|
|
2017 |
|
| Oil Derivatives
(Bbls) |
|
|
|
|
|
| Swap Contracts |
|
|
|
|
|
| Volume |
|
50,000(1) |
|
-- |
|
| Price |
$ |
|
44.00 |
|
$ |
-- |
|
| Collar Contracts |
|
|
|
|
|
| Volume |
|
|
100,000 |
|
|
-- |
|
| Ceiling |
$ |
|
49.05 |
|
$ |
-- |
|
| Floor |
$ |
|
37.50 |
|
$ |
-- |
|
| Collar Contracts with Short
Puts |
|
|
|
|
|
| Volume |
|
|
100,000 |
|
|
-- |
|
| Ceiling |
$ |
|
44.50 |
|
$ |
-- |
|
| Floor |
$ |
|
35.50 |
|
$ |
-- |
|
| Short Put |
$ |
|
26.50 |
|
$ |
-- |
|
| Natural Gas Derivatives
(Mcf) |
|
|
|
|
|
| Swap Contracts |
|
|
|
|
|
| Volume |
|
9,010,000(2) |
|
9,400,000(3) |
| Price |
$ |
|
2.72 |
|
$ |
2.99 |
|
| Swaption Contracts |
|
|
|
|
|
| Volume |
|
|
500,000 |
|
|
-- |
|
| Price |
$ |
|
3.15 |
|
$ |
-- |
|
| Put Spread Contracts |
|
|
|
|
|
| Volume |
|
|
4,860,000 |
|
|
-- |
|
| Floor |
$ |
|
3.28 |
|
$ |
-- |
|
| Short Put |
$ |
|
2.52 |
|
$ |
-- |
|
| Collar Contracts with Short
Puts |
|
|
|
|
|
| Volume |
|
|
1,305,000 |
|
|
16,900,000 |
|
| Ceiling |
$ |
|
3.33 |
|
$ |
3.87 |
|
| Floor |
$ |
|
2.69 |
|
$ |
3.01 |
|
| Short Put |
$ |
|
2.12 |
|
$ |
2.32 |
|
| Call Contracts |
|
|
|
|
|
| Volume |
|
-- |
|
|
8,380,100 |
|
| Ceiling |
$ |
-- |
|
$ |
4.51 |
|
| Collar Contracts |
|
|
|
|
|
| Volume |
|
|
1,860,000 |
|
|
1,400,000 |
|
| Ceiling |
$ |
|
3.02 |
|
$ |
3.10 |
|
| Floor |
$ |
|
2.62 |
|
$ |
2.40 |
|
| Natural Gas Liquids
(Bbls) |
|
|
|
|
|
| Swap Contracts |
|
|
|
|
|
| Propane
(C3) |
|
|
|
|
|
| Volume |
|
|
390,000 |
|
|
312,000 |
|
| Price |
$ |
|
21.56 |
|
$ |
18.04 |
|
| Butane
(C4) |
|
|
|
|
|
| Volume |
|
|
95,000 |
|
|
108,000 |
|
| Price |
$ |
|
27.10 |
|
$ |
23.80 |
|
| Isobutane
(IC4) |
|
|
|
|
|
| Volume |
|
|
40,000 |
|
|
48,000 |
|
| Price |
$ |
|
27.93 |
|
$ |
24.00 |
|
| Natural Gasoline
(C5+) |
|
|
|
|
|
| Volume |
|
|
70,000 |
|
|
-- |
|
| Price |
$ |
|
50.00 |
|
$ |
-- |
|
| Ethane |
|
|
|
|
|
| Volume |
|
|
275,000 |
|
|
540,000 |
|
| Price |
$ |
|
8.49 |
|
$ |
10.13 |
|
| Natural Gas Basis
(Mcf) |
|
|
|
|
|
| Swap Contracts |
|
|
|
|
|
| Dominion
Appalachia |
|
|
|
|
|
| Volume |
|
|
8,881,000 |
|
|
10,755,000 |
|
| Price |
$ |
|
(0.87 |
) |
$ |
(0.79 |
) |
| Texas Gas Zone
1 |
|
|
|
|
|
| Volume |
|
|
-- |
|
|
14,600,000 |
|
| Price |
$ |
|
-- |
|
$ |
(0.13 |
) |
| NYMEX Heating Oil
(Gallon) |
|
|
|
|
|
| Swap Contracts |
|
|
|
|
|
| Volume |
|
|
5,000 |
|
|
-- |
|
| Price |
$ |
|
2.00 |
|
$ |
-- |
|
| (1) Includes
50,000 Bbls of enhanced swaps |
| (2) Includes 2.0
Bcf of enhanced swaps |
| (3) Includes 3.9
Bcf of enhanced swaps |
| |
| |
APPENDIX REX
ENERGY CORPORATIONNON-GAAP MEASURES
EBITDAX
“EBITDAX” means, for any period, the sum of net
income for such period plus the following expenses, charges or
income to the extent deducted from or added to net income in such
period: interest, income taxes, DD&A, unrealized losses from
financial derivatives, non-recurring gains and losses, exploration
expenses and other similar non-cash charges, minus all non-cash
income, including but not limited to, income from unrealized
financial derivatives and gains on asset dispositions, added to net
income. EBITDAX, as defined above, is used as a financial
measure by our management team and by other users of its financial
statements, such as our commercial bank lenders to analyze such
things as:
- Our operating performance and return on capital in comparison
to those of other companies in our industry, without regard to
financial or capital structure;
- The financial performance of our assets and valuation of the
entity without regard to financing methods, capital structure or
historical cost basis;
- Our ability to generate cash sufficient to pay interest costs,
support our indebtedness and make cash distributions to our
stockholders; and
- The viability of acquisitions and capital expenditure projects
and the overall rates of return on alternative investment
opportunities.
EBITDAX is not a calculation based on GAAP
financial measures and should not be considered as an alternative
to net income (loss) (the most directly comparable GAAP financial
measure) in measuring our performance, nor should it be used as an
exclusive measure of cash flows, because it does not consider the
impact of working capital growth, capital expenditures, debt
principal reductions, and other sources and uses of cash, which are
disclosed in our consolidated statements of cash flows.
We have reported EBITDAX because it is a financial
measure used by our existing commercial lenders, and because this
measure is commonly reported and widely used by investors as an
indicator of a company’s operating performance and ability to incur
and service debt. You should carefully consider the specific
items included in our computations of EBITDAX. While we have
disclosed EBITDAX to permit a more complete comparative analysis of
our operating performance and debt servicing ability relative to
other companies, you are cautioned that EBITDAX as reported by us
may not be comparable in all instances to EBITDAX as reported by
other companies. EBITDAX amounts may not be fully available
for management’s discretionary use, due to requirements to conserve
funds for capital expenditures, debt service and other
commitments.
We believe that EBITDAX assists our lenders and
investors in comparing our performance on a consistent basis
without regard to certain expenses, which can vary significantly
depending upon accounting methods. Because we may borrow money
to finance our operations, interest expense is a necessary element
of our costs. In addition, because we use capital assets,
DD&A are also necessary elements of our costs. Finally, we
are required to pay federal and state taxes, which are necessary
elements of our costs. Therefore, any measures that exclude
these elements have material limitations.
To compensate for these limitations, we believe it
is important to consider both net income determined under GAAP and
EBITDAX to evaluate our performance.
For purposes of consistency with current
calculations, we have revised certain amounts relating to prior
period EBITDAX. The following table presents a reconciliation of
our net income to EBITDAX for each of the periods presented.
| |
|
|
|
Three Months Ended June
30, |
|
Six Months EndedJune
30, |
|
|
|
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
| Net Loss
From Continuing Operations |
|
$ |
|
(52,911 |
) |
|
$ |
|
(151,342 |
) |
|
$ |
|
(105,562 |
) |
|
$ |
|
(166,335 |
) |
|
Add Back (Less) Non-Recurring Costs (Income)1 |
|
|
(23,174 |
) |
|
|
(248 |
) |
|
|
(14,694 |
) |
|
|
4,774 |
|
|
Add Back Depletion, Depreciation, Amortization and Accretion |
|
|
14,750 |
|
|
|
24,698 |
|
|
|
31,262 |
|
|
|
46,537 |
|
|
Add Back Non-Cash Compensation Expense |
|
|
1,164 |
|
|
|
1,804 |
|
|
|
1,016 |
|
|
|
4,635 |
|
|
Add Back Interest Expense |
|
|
11,439 |
|
|
|
12,181 |
|
|
|
24,469 |
|
|
|
24,193 |
|
|
Add Back Impairment Expense |
|
|
25,139 |
|
|
|
117,839 |
|
|
|
35,780 |
|
|
|
124,687 |
|
|
Add Back Exploration Expenses |
|
|
803 |
|
|
|
755 |
|
|
|
1,738 |
|
|
|
1,194 |
|
|
Less Gain on Disposal of Assets |
|
|
(4,307 |
) |
|
|
(373 |
) |
|
|
(4,295 |
) |
|
|
(309 |
) |
|
Add Back (Less) (Gain) Loss on Financial Derivatives2 |
|
|
29,169 |
|
|
|
281 |
|
|
|
25,120 |
|
|
|
(16,838 |
) |
|
Add Back Cash Settlement of Derivatives |
|
|
17,345 |
|
|
|
13,941 |
|
|
|
30,340 |
|
|
|
25,020 |
|
|
Add Back (Less) Income Tax Expense (Benefit) |
|
|
(393 |
) |
|
-- |
|
|
|
2,321 |
|
|
|
|
|
-- |
|
|
Add Back Non-Cash Portion of Equity Method Investments |
|
|
|
|
-- |
|
|
|
203 |
|
|
|
|
|
-- |
|
|
|
406 |
|
| EBITDAX
From Continuing Operations |
|
$ |
|
19,024 |
|
|
$ |
|
19,739 |
|
$ |
|
27,495 |
|
$ |
|
47,964 |
|
| Net Loss
From Discontinued Operations, Net of Income Taxes |
|
$ |
|
(1,683 |
) |
|
$ |
|
(461 |
) |
$ |
|
(9,173 |
) |
$ |
|
(1,985 |
) |
| Income
Attributable to Noncontrolling Interests |
|
|
|
|
-- |
|
|
|
(949 |
) |
|
|
|
|
-- |
|
|
|
(2,246 |
) |
| Loss
From Discontinued Operations Attributable to Rex Energy |
|
|
(1,683 |
) |
|
|
(1,410 |
) |
|
|
(9,173 |
) |
|
|
(4,231 |
) |
|
Add Back Depletion, Depreciation, Amortization and Accretion |
|
|
2,186 |
|
|
|
4,877 |
|
|
|
5,083 |
|
|
|
9,203 |
|
|
Add Back Non-Cash Compensation Expense |
|
|
139 |
|
|
|
154 |
|
|
|
259 |
|
|
|
286 |
|
|
Add Back Interest Expense |
|
|
1 |
|
|
|
253 |
|
|
|
3 |
|
|
|
448 |
|
|
Add Back Impairment Expense |
|
|
|
|
-- |
|
|
|
3 |
|
|
|
3,543 |
|
|
|
178 |
|
|
Add Back Exploration Expense |
|
|
85 |
|
|
|
162 |
|
|
|
143 |
|
|
|
241 |
|
|
Add Back (Less) (Gain) Loss on Disposal of Assets |
|
|
(2 |
) |
|
|
62 |
|
|
|
(43 |
) |
|
|
31 |
|
|
Less Non-Cash Portion of Noncontrolling Interests |
|
|
|
|
-- |
|
|
|
(107 |
) |
|
|
|
|
-- |
|
|
|
(186 |
) |
|
Add Back (Less) Income Tax Expense (Benefit) |
|
|
120 |
|
|
|
(101 |
) |
|
|
(502 |
) |
|
|
242 |
|
|
Add EBITDAX From Discontinued Operations |
|
$ |
|
846 |
|
|
$ |
|
3,893 |
|
|
$ |
|
(687 |
) |
|
$ |
|
6,212 |
|
| EBITDAX
(Non-GAAP) |
|
$ |
|
19,870 |
|
|
$ |
|
23,632 |
|
|
$ |
|
26,808 |
|
|
$ |
|
54,176 |
|
| |
| 1 For the three months ended June 30, 2016, includes
approximately $23.7 million in gains on the extinguishment of debt
and $0.5 million in debt exchange expenses. For the six months
ended June 30, 2016, includes approximately $23.7 million in gains
on the extinguishment of debt and $9.0 million in debt exchange
expenses. For the three and six months ended June 30, 2015,
includes net fees incurred to terminate two drilling rig contracts
earlier than their original term. |
| 2 For the three and six months ended June 30, 2016, includes
approximately $2.0 million in additional proceeds from liquidated
derivatives. |
Adjusted Net Income
“Adjusted Net Income” means, for any period, the sum of net
income (loss) from continuing operations before income taxes for
the period plus the following expenses, charges or income, in each
case, to the extent deducted from or added to net income in the
period: unrealized losses from financial derivatives, non-cash
compensation expense, dry hole expenses, disposals of assets,
impairment and other one-time or non-recurring charges, minus all
gains from unrealized financial derivatives, disposal of assets and
deferred income tax benefits, added to net income. Adjusted Net
Income is used as a financial measure by Rex Energy's management
team and by other users of its financial statements, to analyze its
financial performance without regard to non-cash deferred taxes and
non-cash unrealized losses or gains from oil and gas derivatives.
Adjusted Net Income is not a calculation based on GAAP financial
measures and should not be considered as an alternative to net
income (loss) in measuring the company's performance.
Rex Energy reports Adjusted Net Income because it believes that
this measure is commonly reported and widely used by investors as
an indicator of a company's operating performance. You should
carefully consider the specific items included in the company's
computation of this measure. You are cautioned that Adjusted Net
Income as reported by Rex Energy may not be comparable in all
instances to that reported by other companies.
To compensate for these limitations, the company believes it is
important to consider both net income determined under GAAP and
Adjusted Net Income.
The following table presents a reconciliation of Rex Energy’s
net income from continuing operations to its adjusted net income
for each of the periods presented ($ in thousands):
| |
|
|
|
| |
For the Three Months Ended |
|
For the Six Months Ended |
| |
June 30, |
|
June 30, |
| |
|
|
2016 |
|
|
|
2015 |
|
|
|
|
2016 |
|
|
|
2015 |
|
| Loss From Continuing Operations
Before Income Taxes, as reported |
$ |
|
(53,304 |
) |
$ |
|
(151,342 |
) |
|
$ |
|
(103,241 |
) |
$ |
|
(166,335 |
) |
| Gain (Loss) on Derivatives,
Net |
|
|
29,169 |
|
|
|
281 |
|
|
|
|
25,120 |
|
|
|
(16,838 |
) |
| Cash Settlement of
Derivatives |
|
|
17,345 |
|
|
|
13,941 |
|
|
|
|
30,340 |
|
|
|
25,020 |
|
| Add Back Losses from
Financial Derivatives |
|
|
46,514 |
|
|
|
14,222 |
|
|
|
|
55,460 |
|
|
|
8,182 |
|
| Add Back Non-Recurring
Costs1 |
|
|
(23,174 |
) |
|
|
(248 |
) |
|
|
|
(14,694 |
) |
|
|
4,774 |
|
| Add Back Impairment
Expense |
|
|
25,139 |
|
|
|
117,839 |
|
|
|
|
35,780 |
|
|
|
124,687 |
|
| Add Back Dry Hole
Expense |
|
|
2 |
|
|
|
192 |
|
|
|
|
845 |
|
|
|
191 |
|
| Add Back Non-Cash
Compensation Expense |
|
|
1,164 |
|
|
|
1,804 |
|
|
|
|
1,016 |
|
|
|
4,635 |
|
| Less Gain Loss on Disposal
of Assets |
|
|
(4,307 |
) |
|
|
(373 |
) |
|
|
|
(4,295 |
) |
|
|
(309 |
) |
| Loss From Continuing Operations
Before Income Taxes, adjusted |
$ |
|
(7,966 |
) |
$ |
|
(17,906 |
) |
|
$ |
|
(29,129 |
) |
$ |
|
(24,175 |
) |
| Less Income Tax Benefit,
adjusted2 |
|
|
3,186 |
|
|
|
7,162 |
|
|
|
|
11,652 |
|
|
|
9,670 |
|
| Adjusted Net Loss From Continuing
Operations |
$ |
|
(4,780 |
) |
$ |
|
(10,764 |
) |
|
$ |
|
(17,477 |
) |
$ |
|
(14,505 |
) |
| |
|
|
|
|
|
|
|
|
|
| Basic – Adjusted Net Income (Loss)
Per Share |
$ |
|
(0.07 |
) |
$ |
|
(0.20 |
) |
|
$ |
|
(0.27 |
) |
$ |
|
(0.27 |
) |
| Basic – Weighted Average Shares of
Common Stock Outstanding |
|
|
71,804 |
|
|
|
54,118 |
|
|
|
|
64,044 |
|
|
|
54,090 |
|
| 1 For the three months ended June 30, 2016, includes
approximately $23.7 million in gains on the extinguishment of debt
and $0.5 million in debt exchange expenses. For the six months
ended June 30, 2016, includes approximately $23.7 million in gains
on the extinguishment of debt and $9.0 million in debt exchange
expenses. For the three and six months ended June 30, 2015,
includes net fees incurred to terminate two drilling rig contracts
earlier than their original term |
| 2 Assumes an effective tax rate of 40% |
Cash General and Administrative
Expenses
Cash General and Administrative Expenses (Cash
G&A) is the difference between GAAP G&A and non-Cash
G&A, which is primarily comprised of non-cash compensation
expense. Rex Energy has reported Cash G&A because it believes
that this measure is commonly reported and widely used by
management and investors as an indicator of overhead efficiency
without regard to non-cash expenditures, such as stock
compensation. Cash G&A is not a calculation based on GAAP
financial measures and should not be considered as an alternative
to GAAP G&A in measuring the company’s performance. You should
carefully consider the specific items included in the company’s
computation of this measure. You are cautioned that Cash G&A as
reported by Rex Energy may not be comparable in all instances to
that reported by other companies.
To compensate for these limitations, the company
believes it is important to consider both Cash G&A and GAAP
G&A. The following table presents a reconciliation of Rex
Energy’s GAAP G&A to its Cash G&A for each of the periods
presented (in thousands):
| |
|
|
|
| |
Three Months Ended June
30, |
|
Six Months Ended June
30, |
| |
2016 |
|
2015 |
|
2016 |
|
2015 |
| GAAP
G&A |
$ |
4,837 |
|
$ |
7,394 |
|
$ |
10,121 |
|
$ |
15,745 |
| Non-Cash
Compensation Expense |
1,164 |
|
1,804 |
|
1,016 |
|
4,635 |
| Cash
G&A |
$ |
3,673 |
|
$ |
5,590 |
|
$ |
9,105 |
|
$ |
11,110 |
For more information contact:
Investor Relations
(814) 278-7130
InvestorRelations@rexenergycorp.com