HOUSTON, Aug. 4, 2016 /PRNewswire/ -- Gastar Exploration
Inc. (NYSE MKT: GST) ("Gastar" or the "Company") today reported
financial and operating results for the three and six months ended
June 30, 2016.
Net loss attributable to Gastar's common stockholders for the
second quarter of 2016 was $18.1 million, or a loss of $0.17 per share. This compares to a second
quarter 2015 net loss of $118.0 million, or a loss of $1.52 per share. Adjusted net loss
attributable to common stockholders for the second quarter of 2016
was $12.5 million, or a loss of
$0.12 per share, excluding the impact
of a $3.3 million loss resulting from
the mark-to-market of outstanding hedge positions, a $2.0 million allowance for bad debt related to a
third-party production purchaser's bankruptcy and other special
items as compared to a second quarter 2015 adjusted net loss of
$10.1 million, or a loss of
$0.13 per share, excluding the impact
of a $100.2 million non-cash, pre-tax
ceiling test impairment charge and a $7.8
million loss resulting from the mark-to-market of
outstanding hedge positions. (See the accompanying reconciliation
of net loss to net loss excluding special items at the end of this
news release.)
Adjusted earnings before interest, income taxes, depreciation,
depletion and amortization ("adjusted EBITDA") for the second
quarter of 2016 was $6.8 million
compared to adjusted EBITDA of $17.9 million for the second quarter of 2015
and $10.7 million for the first
quarter of 2016. (See the accompanying reconciliation of net
loss to adjusted EBITDA, a non-GAAP number, at the end of this news
release.)
Total revenues were $12.2 million
in the second quarter of 2016, a 45% decline from $21.9 million in the second quarter of 2015 and
an 18% decline from $14.8 million in
the first quarter of 2016. Revenues from the sale of oil,
condensate, natural gas and natural gas liquids ("NGLs"), before
the effects of commodity derivatives contracts, were $14.9 million in the second quarter of 2016, a
37% decline from $23.7 million in the
second quarter of 2015 and a 3% increase from $14.5 million in the first quarter of 2016.
The reduction from second quarter of 2015 in oil, condensate,
natural gas and NGLs revenues (excluding the impact of hedging
activities) primarily resulted from a 54% decrease in equivalent
production volumes offset by a 36% increase in weighted average
realized equivalent prices. The increase from first quarter 2016
revenues was due to a 112% increase in equivalent product pricing
offset by a 52% decrease in equivalent production volumes. On
April 8, 2016, Gastar sold
substantially all of its producing assets and proved reserves and a
significant portion of its undeveloped acreage in the Appalachian
Basin for an adjusted sales price of $76.6
million (the "Appalachian Basin Sale"). As a result of the
sale, net production from the Appalachian Basin area averaged 200
barrels of oil equivalent per day ("Boe/d") in the second quarter
of 2016, compared to 7,700 Boe/d for the second quarter of 2015 and
7,100 Boe/d in the first quarter of 2016. Excluding the
impact of Appalachian Basin production and the effects of commodity
derivatives contracts, revenues from liquids (oil, condensate and
NGLs) represented approximately 88% of total production revenues in
the second quarter of 2016, compared to 89% in the second quarter
of 2015 and 85% in the first quarter of 2016.
Commodity derivative benefits derived from hedge contracts
monetized during the second quarter of 2016 resulted in a
$565,000 increase in revenues
compared to a $6.0 million increase
in revenue for the second quarter of 2015. During the first
quarter of 2016, Gastar monetized all of its put spread and other
hedge positions covering the production months April through
July 2016 for net proceeds of
$3.1 million.
During the second quarter of 2016, the impact of hedging on oil
and condensates sales was an increase in the total price realized
from $41.82 per Bbl to $43.59 per Bbl. In the second quarter of
2015, the impact of hedging on oil and condensate sales was an
increase in total price realized from $47.68 per Bbl to $52.20 per Bbl.
During the second quarter of 2016, Gastar allocated 15% of its
oil hedges that were monetized to NGLs which resulted in an
increase in the total price realized from $12.02 per Bbl to $12.62 per Bbl. In the second quarter of
2015, the impact of hedging on NGLs sales resulted in an increase
in total price realized from $7.34
per Bbl to $14.97 per Bbl.
During the second quarter of 2016, Gastar did not have any
natural gas volumes hedged as a result of hedge monetizations in
the first quarter of 2016 and the average realized price for
natural gas production was $1.84 per
Mcf. During the second quarter of 2015, the impact of hedging
on natural gas sales was an increase in total price realized from
$1.10 per Mcf to $1.68 per Mcf.
We continue to maintain an active hedging program covering a
portion of estimated future production for July 2016 to December
2018, which is reported in our periodic filings with the
U.S. Securities and Exchange Commission ("SEC").
Average daily production for the second quarter of 2016 was
6,400 Boe/d as compared to 13,900 Boe/d in the second quarter of
2015 and 13,200 Boe/d in the first quarter of 2016. Second quarter
2015 and first quarter 2016 includes average daily production of
7,700 Boe/d and 7,100 Boe/d, respectively, attributable to our
properties in the Appalachian Basin, substantially all of which
were sold April 8, 2016 in the
Appalachian Basin Sale with an effective date of January 1, 2016. Excluding the Appalachian
Basin, oil, condensate and NGLs as a percentage of production
volumes were 71% in the second quarter of 2016 compared to 74% in
the second quarter of 2015 and 71% for the first quarter of
2016.
The following table provides a summary of Gastar's total net
production volumes and overall average commodity prices for the
three and six months ended June 30,
2016 and 2015:
|
|
For the Three
Months
Ended June 30,
|
|
|
For the Six
Months
Ended June 30,
|
|
|
|
2016(1)
|
|
|
2015
|
|
|
2016(1)
|
|
|
2015
|
|
|
|
(In thousands,
except per unit amounts)
|
|
Net
Production:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil and condensate
(MBbl)
|
|
|
271
|
|
|
|
369
|
|
|
|
595
|
|
|
|
736
|
|
Natural gas
(MMcf)
|
|
|
1,019
|
|
|
|
3,575
|
|
|
|
4,223
|
|
|
|
6,870
|
|
NGLs (MBbl)
|
|
|
142
|
|
|
|
297
|
|
|
|
488
|
|
|
|
516
|
|
Total net production
(MBoe)
|
|
|
583
|
|
|
|
1,262
|
|
|
|
1,786
|
|
|
|
2,397
|
|
Net Daily
production:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil and condensate
(MBbl/d)
|
|
|
3.0
|
|
|
|
4.1
|
|
|
|
3.3
|
|
|
|
4.1
|
|
Natural gas
(MMcf/d)
|
|
|
11.2
|
|
|
|
39.3
|
|
|
|
23.2
|
|
|
|
38.0
|
|
NGLs
(MBbl/d)
|
|
|
1.6
|
|
|
|
3.3
|
|
|
|
2.7
|
|
|
|
2.9
|
|
Total net daily
production (MBoe/d)
|
|
|
6.4
|
|
|
|
13.9
|
|
|
|
9.8
|
|
|
|
13.2
|
|
Average sales price
per unit:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil and condensate per
Bbl, including impact of hedging activities
(2)
|
|
$
|
43.59
|
|
|
$
|
52.20
|
|
|
$
|
42.48
|
|
|
$
|
49.86
|
|
Oil and condensate per
Bbl, excluding impact of hedging activities
|
|
$
|
41.82
|
|
|
$
|
47.68
|
|
|
$
|
33.91
|
|
|
$
|
44.76
|
|
Natural gas per Mcf,
including impact of hedging activities (2)
|
|
$
|
1.84
|
|
|
$
|
1.68
|
|
|
$
|
1.65
|
|
|
$
|
2.11
|
|
Natural gas per Mcf,
excluding impact of hedging activities
|
|
$
|
1.84
|
|
|
$
|
1.10
|
|
|
$
|
1.40
|
|
|
$
|
1.55
|
|
NGLs per Bbl,
including impact of hedging activities (2)
|
|
$
|
12.62
|
|
|
$
|
14.97
|
|
|
$
|
9.38
|
|
|
$
|
16.72
|
|
NGLs per Bbl,
excluding impact of hedging activities
|
|
$
|
12.02
|
|
|
$
|
7.34
|
|
|
$
|
6.98
|
|
|
$
|
8.29
|
|
Average sales price
per Boe, including impact of hedging activities
(2)
|
|
$
|
26.57
|
|
|
$
|
23.54
|
|
|
$
|
20.60
|
|
|
$
|
24.96
|
|
Average sales price
per Boe, excluding impact of hedging activities
|
|
$
|
25.60
|
|
|
$
|
18.79
|
|
|
$
|
16.49
|
|
|
$
|
19.97
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
The three and six
months ended June 30, 2016 reflect the impact of the Appalachian
Basin Sale completed on April 8, 2016.
|
(2)
|
The impact of hedging
includes only the gain (loss) on commodity derivative contracts
settled during the periods presented.
|
Lease operating expenses ("LOE") were $4.6 million for the second quarter of 2016,
compared to $7.2 million in the
second quarter of 2015 and $6.1
million in the first quarter of 2016. Excluding the
Appalachian Basin, LOE decreased $1.2
million, or 20%, to $4.5
million for the second quarter of 2016 from the second
quarter of 2015 due primarily to a $1.6
million decrease in workover expense resulting from a
decrease in workover activity and receipt of a $588,000 insurance reimbursement related to 2015
activity offset by a $538,000
increase in controllable LOE primarily due to new West Edmond
Hunton Lime Unit, or WEHLU, wells drilled in the second half of
2015 and production enhancing operations. LOE per barrel of
oil equivalent ("Boe") of production as reported was $7.86 in the second quarter of 2016 versus
$5.74 in the second quarter of 2015
and $5.05 in the first quarter of
2016, including workover costs. Excluding the Appalachian
Basin and workover expense, LOE per Boe for the second quarter of
2016 was $8.36 compared to
$7.59 for the second quarter of 2015
and $7.93 per Boe for the first
quarter of 2016.
Depreciation, depletion and amortization ("DD&A") expense
was $5.6 million in the second
quarter of 2016, down from $16.1
million in the second quarter of 2015 and $13.7 million in the first quarter of 2016.
The DD&A rate for the second quarter of 2016 was $9.59 per Boe compared to $12.74 per Boe for the second quarter of 2015 and
$11.41 per Boe in the first quarter
of 2016. The decrease in DD&A expense and the DD&A
rate was the result of a decrease in production resulting from the
completion of the Appalachian Basin Sale coupled with a lower
DD&A rate due to impairment charges incurred in 2015 and the
first quarter 2016 and lower full cost property costs resulting
from the Appalachian Basin Sale.
General and administrative ("G&A") expense was $6.3 million in the second quarter of 2016
compared to $4.4 million in the
second quarter of 2015 and $5.7
million in the first quarter of 2016. G&A expense for
the second quarter of 2016 included $702,000 of non-cash stock-based compensation
expense, versus $1.2 million in the
second quarter of 2015 and $1.6
million in the first quarter of 2016. Excluding
stock-based compensation expense, the higher G&A expense in the
second quarter of 2016 compared to the prior year period is
primarily due to an allowance for a bad debt expense charge of
$2.0 million related to a third-party
production purchaser's bankruptcy.
J. Russell Porter, Gastar's
President and CEO, commented, "Our secondary equity offering in
May 2016 yielded net proceeds of
approximately $44.8 million,
improving our liquidity position and allowing us to resume operated
drilling on our extensive STACK acreage position. We have
developed a drilling program of up to nine wells that will test the
STACK potential across our northern acreage in Kingfisher County, Oklahoma as well as allow
us to pursue a drilling program to de-risk our southern acreage in
Canadian County, Oklahoma.
We believe that drilling a select number of additional operated
wells, coupled with the continuing success of offset operators
developing the STACK Play near our acreage, should allow us to
delineate and demonstrate the prospectivity of our acreage in
multiple formations and confirm its value. Well data from our
own operated wells, combined with data from the numerous
non-operated STACK wells that we are participating in, should
provide additional options for funding further exploration and
development of the STACK Play. During the remainder of 2016
and into 2017, we will continue to evaluate potential opportunities
to partner with other operators or investors in a drilling program
to develop our undeveloped acreage, evaluate possible acreage
divestments, or possibly raise funds in the capital markets to
further enhance our liquidly and further fund the development of
our acreage position in the STACK Play, which we believe is one of
the most economic plays in North
America."
Operations Review and Update
Mid-Continent
The following table provides a summary of Gastar's Mid-Continent
production volumes and average commodity prices for the three and
six months ended June 30, 2016 and
2015:
|
|
For the Three
Months Ended
June 30,
|
|
|
For the Six Months
Ended
June 30,
|
|
Mid-Continent
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
Net
Production:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil and condensate
(MBbl)
|
|
|
271
|
|
|
|
304
|
|
|
|
548
|
|
|
|
601
|
|
Natural gas
(MMcf)
|
|
|
970
|
|
|
|
889
|
|
|
|
1,920
|
|
|
|
1,686
|
|
NGLs (MBbl)
|
|
|
133
|
|
|
|
113
|
|
|
|
252
|
|
|
|
209
|
|
Total net production
(MBoe)
|
|
|
566
|
|
|
|
565
|
|
|
|
1,120
|
|
|
|
1,091
|
|
Net Daily
Production:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil and condensate
(MBbl/d)
|
|
|
3.0
|
|
|
|
3.3
|
|
|
|
3.0
|
|
|
|
3.3
|
|
Natural gas
(MMcf/d)
|
|
|
10.7
|
|
|
|
9.8
|
|
|
|
10.5
|
|
|
|
9.3
|
|
NGLs
(MBbl/d)
|
|
|
1.5
|
|
|
|
1.2
|
|
|
|
1.4
|
|
|
|
1.2
|
|
Total net daily
production (MBoe/d)
|
|
|
6.2
|
|
|
|
6.2
|
|
|
|
6.2
|
|
|
|
6.0
|
|
Average sales price
per unit(1):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil and condensate
(per Bbl)
|
|
$
|
41.55
|
|
|
$
|
53.86
|
|
|
$
|
35.80
|
|
|
$
|
50.40
|
|
Natural gas (per
Mcf)
|
|
$
|
1.87
|
|
|
$
|
2.47
|
|
|
$
|
1.84
|
|
|
$
|
2.81
|
|
NGLs (per
Bbl)
|
|
$
|
14.53
|
|
|
$
|
14.98
|
|
|
$
|
12.57
|
|
|
$
|
14.69
|
|
Average sales price
per Boe(1)
|
|
$
|
26.54
|
|
|
$
|
35.86
|
|
|
$
|
23.50
|
|
|
$
|
34.92
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Excludes the impact
of hedging activities.
|
Net production from the Mid-Continent area averaged 6,200 Boe/d
in the second quarter of 2016, which was flat compared to the
second quarter of 2015 and up slightly from 6,100 Boe/d in the
first quarter of 2016. Second quarter 2016 Mid-Continent production
consisted of approximately 48% oil, 29% natural gas and 23%
NGLs.
In October 2015, Gastar commenced
flowback of its first operated Meramec well, the Deep River 30-1H,
which in December 2015, produced at a
peak 24-hour rate of 1,094 Boe/d (71% oil) and has produced at a
post-peak 230-day gross average daily rate of 513 Boe/d (53%
oil). Gastar's working interest in the Deep River 30-1H is
100% (NRI 80.2%).
In April 2016, Gastar's second
operated well testing the Meramec formation, the Holiday Road 2-1H,
commenced flow-back. In June
2016, the well was equipped with a larger gas lift system
and oil and natural gas production from the well continues to
gradually increase. During the most recent 30-day period, the
well averaged 267 gross Boe/d (81% oil) and 2,063 barrels of
completion fluid. During the most recent five-day period the
well produced at a gross average rate of 343 Boe/d (82% oil) and
2,199 barrels of completion fluids. Gastar has a 78.3%
working (approximate 63.0% NRI) interest in the Holiday Road 2-1H
well.
On June 20, 2016, Gastar spudded
its first operated Osage test
well, the McGee 29-1H, with a projected vertical depth of
approximately 7,600 feet and a 4,200 foot horizontal lateral in
Garfield County, Oklahoma.
Gastar's current estimated working interest in the McGee 29-1H is
66.3% (NRI 53%). The estimated gross cost to drill and
complete the McGee 29-1H is $4.5
million, excluding costs associated with coring operations
to evaluate the Osage and
Woodford Shale formations.
To gather additional data on drilling and completing each of the
prospective targets, year to date in 2016, Gastar has participated
in four gross (0.5 net) completed non-operated Meramec Shale wells,
one gross (0.2 net) completed non-operated well targeting the
Osage, three gross (0.4 net)
completed non-operated wells targeting the Oswego and one gross
(0.1 net) completed non-operated Woodford
Shale well.
In the Mid-Continent, Gastar's net capital expenditures in the
second quarter of 2016 totaled $8.1
million, comprised of $4.3
million for drilling, completions and infrastructure costs,
$2.8 million for unproved acreage
extensions and renewals and $1.0
million for other capitalized costs. Year to date 2016
net capital expenditures in the Mid-Continent totaled $23.1 million, comprised of $10.0 million for drilling, completions and
infrastructure costs, $11.1 million
for unproved acreage extensions and renewals and $2.0 million for other capitalized
costs.
For the remainder of 2016, Gastar's capital expenditure budget
is $38.1 million, comprised of
$25.9 million for drilling,
completion and infrastructure costs, $9.2
million for lease renewal and extension costs and
$3.0 million for other capitalized
costs, resulting in a total 2016 capital expenditures budget of
$61.2 million. Gastar's capital
expenditure budget remains subject to change based upon the
commodity price environment and our liquidity position.
Appalachian Basin
On April 8, 2016, Gastar sold
substantially all of its producing assets and proved reserves and a
significant portion of its undeveloped acreage in the Appalachian
Basin. The following table provides a summary of Gastar's
Appalachian Basin net production volumes and average commodity
prices for the three and six months ended June 30, 2016 and 2015:
|
|
For the Three
Months Ended
June 30,
|
|
|
For the Six Months
Ended
June 30,
|
|
|
|
2016(1)
|
|
|
2015
|
|
|
2016(1)
|
|
|
2015
|
|
Appalachian
Basin
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Production:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil and condensate
(MBbl)
|
|
|
—
|
|
|
|
65
|
|
|
|
47
|
|
|
|
135
|
|
Natural gas
(MMcf)
|
|
|
49
|
|
|
|
2,686
|
|
|
|
2,303
|
|
|
|
5,183
|
|
NGLs (MBbl)
|
|
|
9
|
|
|
|
185
|
|
|
|
236
|
|
|
|
307
|
|
Total net production
(MBoe)
|
|
|
18
|
|
|
|
697
|
|
|
|
667
|
|
|
|
1,306
|
|
Net Daily
Production:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil and condensate
(MBbl/d)
|
|
|
—
|
|
|
|
0.7
|
|
|
|
0.3
|
|
|
|
0.7
|
|
Natural gas
(MMcf/d)
|
|
|
0.5
|
|
|
|
29.5
|
|
|
|
12.7
|
|
|
|
28.6
|
|
NGLs
(MBbl/d)
|
|
|
0.1
|
|
|
|
2.0
|
|
|
|
1.3
|
|
|
|
1.7
|
|
Total net daily
production (MBoe/d)
|
|
|
0.2
|
|
|
|
7.7
|
|
|
|
3.7
|
|
|
|
7.2
|
|
Average sales price
per unit (2):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil and condensate
(per Bbl)
|
|
$
|
—
|
|
|
$
|
18.82
|
|
|
$
|
11.71
|
|
|
$
|
19.57
|
|
Natural gas (per
Mcf)
|
|
$
|
1.23
|
|
|
$
|
0.65
|
|
|
$
|
1.02
|
|
|
$
|
1.14
|
|
NGLs (per
Bbl)
|
|
$
|
(23.68)
|
|
|
$
|
2.69
|
|
|
$
|
1.00
|
|
|
$
|
3.93
|
|
Average sales price
per Boe (2)
|
|
$
|
(4.49)
|
|
|
$
|
4.98
|
|
|
$
|
4.71
|
|
|
$
|
7.48
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
The three and six
months ended June 30, 2016 reflect the impact of the Appalachian
Basin Sale completed on April 8, 2016.
|
(2)
|
Excludes the impact
of hedging activities.
|
Liquidity
On April 8, 2016, we sold
substantially all of our producing assets and proved reserves and a
significant portion of our undeveloped acreage in the Appalachian
Basin for an adjusted sales price of $76.6
million. On May 12,
2016, we sold 50,000,000 shares of our common stock in an
underwritten public offering for approximately $44.8 million of net proceeds. At
June 30, 2016, Gastar had
approximately $50.8 million in
available cash and cash equivalents, $99.6
million in borrowings outstanding and $370,000 in letters of credit issued under its
revolving credit facility.
As of June 30, 2016, we were in
compliance with all financial covenants under the revolving credit
facility. We may, however, need to request a waiver of
compliance with, or amendment to, certain of our financial
covenants by year-end 2016, which may not be received. The
absence of such relief could result in significant adverse
consequences and require us to pursue various
alternatives.
Guidance for Third Quarter and Full-Year 2016
Our guidance for the third quarter of and full-year 2016 is
provided in the table below and represents the Company's best
estimate of the range of likely future results.
Guidance could be affected by the factors described below in
"Forward Looking Statements."
Production
|
|
Third
Quarter
2016
|
|
Full-Year
2016
|
|
|
|
|
|
Net average daily
(MBoe/d)
|
|
5.3 – 5.8
|
|
7.4 – 7.9
|
Liquids
percentage
|
|
68% – 72%
|
|
63% – 67%
|
|
|
|
|
|
Cash Operating
Expenses
|
|
|
|
|
Production taxes (%
of production revenues)
|
|
2.3% –
2.6%
|
|
3.3% –
3.6%
|
Lease operating
($/Boe)
|
|
$9.70 –
$10.50
|
|
$7.30 –
$8.00
|
Transportation,
treating & gathering ($/Boe)
|
|
$0.40 –
$0.50
|
|
$0.45 –
$0.60
|
Cash general &
administrative ($/Boe)
|
|
$6.35 –
$7.00
|
|
$4.60 –
$5.00
|
Mid-Year 2016 Reserve Update
SEC proved reserve estimates as of June
30, 2016 totaled 32.8 MMBoe, of which 42% is proved
developed, and were comprised of 19.7 million barrels of crude oil
and condensate, 6.0 million barrels of NGLs and 42.2 billion cubic
feet of natural gas. The pre-tax SEC-priced present value of
future cash flows of these reserves, discounted at 10% ("PV-10") (a
non-GAAP financial measure defined below in "Information on
Reserves and PV-10 Value"), was $205.7
million, a 10% decline as compared to year-end 2015 as a
result of lower proved reserve volumes and lower SEC prices.
The proved reserves volume decline of 23.1 MMBoe, or 41%, is
primarily attributable to the sale of approximately 14.1 MMBoe of
proved reserves in the Appalachian Basin and a declining commodity
price environment that has rendered some proved undeveloped well
locations uneconomic. In accordance with SEC regulations,
estimates of proved reserves as of June 30,
2016 were calculated using the 12-month unweighted
arithmetic average of the first-day-of-the-month price for each
month in the period July 1, 2015
through June 30, 2016. For oil
volumes, the average West Texas Intermediate price utilized was
$43.12 per barrel, compared to
$50.28 per barrel for year-end 2015,
and for natural gas volumes, the average Henry Hub price utilized
was $2.24 per million Btu (MMBtu),
compared to $2.59 per MMBtu for
year-end 2015. These benchmark oil and natural gas prices
were adjusted for energy content or quality, transportation and
regional price differentials by area.
For a discussion of PV-10 and the standardized measure of future
net cash flows, see "Information on Reserves and PV-10 Value."
Conference Call
Gastar has scheduled a conference call for 11:00 a.m.
Eastern Time (10:00 a.m. Central
Time) on Friday, August 5,
2016. Investors may participate in the call either by phone
or audio webcast.
By
Phone:
|
Dial 1-412-902-0030
at least 10 minutes before the call. A telephone replay will be
available through August 12 by dialing 1-201-612-7415 and using the
conference ID:13641002.
|
|
|
By
Webcast:
|
Visit the Investor
Relations page of Gastar's website at www.gastar.com under "Events
& Presentations." Please log on a few minutes in advance to
register and download any necessary software. A replay will be
available shortly after the call.
|
For more information, please contact Donna
Washburn at Dennard-Lascar Associates at 713-529-6600 or
e-mail dwashburn@DennardLascar.com.
About Gastar Exploration
Gastar Exploration Inc. is a pure play Mid-Continent independent
energy company engaged in the exploration, development and
production of oil, condensate, natural gas and natural gas liquids.
Gastar's principal business activities include the identification,
acquisition, and subsequent exploration and development of oil and
natural gas properties with an emphasis on unconventional reserves,
such as shale resource plays. Gastar holds a concentrated acreage
position in what is believed to be the core of the STACK Play, an
area of central Oklahoma which is
home to multiple oil and natural gas-rich reservoirs including the
Meramec, Oswego, Osage, Woodford
and Hunton formations. For more information, visit Gastar's website
at www.gastar.com.
Information on Reserves and PV-10 Value
At June 30, 2016, future cash
inflows were computed using the 12-month unweighted arithmetic
average of the first-day-of-the-month prices for natural gas and
oil (the "benchmark base prices") adjusted by lease in accordance
with sales contracts and for energy content, quality,
transportation, compression and gathering fees and regional price
differentials, relating to the Company's proved reserves.
Benchmark base prices are held constant in accordance with SEC
guidelines for the life of the wells but are adjusted by lease in
accordance with sales contracts and for energy content, quality,
transportation, compression, and gathering fees and regional price
differentials. The average benchmark base prices used in our
June 30, 2016 SEC compliant reserves
report are significantly above current market commodity prices.
PV-10 represents the present value, discounted at 10% per annum,
of estimated future net revenue before income tax of our estimated
proved reserves. PV-10 is a non-GAAP financial measure as
defined by the SEC. We believe that the presentation of PV-10
is relevant and useful to our investors because it presents the
discounted future net cash flows attributable to our reserves prior
to taking into account corporate future income taxes and our
current tax structure. We further believe investors and
creditors use PV-10 as a basis for comparison of the relative size
of our reserves as compared with other companies.
The financial measure most directly comparable to PV-10 is the
standardized measure of future net cash flows ("Standardized
Measure") which takes into account future income taxes and our
current tax structure. As a result of our current net
operating tax loss position, no future income taxes are anticipated
and the PV-10 value shown should be reflective of our Standardized
Measure.
The Company's June 30, 2016 total
proved reserves estimates were prepared by Wright & Company,
Inc.
Forward Looking Statements
This news release includes "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 give our current
expectations, opinion, belief or forecasts of future events and
performance. A statement identified by the use of forward
looking words including "may," "expects," "projects,"
"anticipates," "plans," "believes," "estimate," "will," "should,"
and certain of the other foregoing statements may be deemed
forward-looking statements. Although Gastar believes that the
expectations reflected in such forward-looking statements are
reasonable, these statements involve risks and uncertainties that
may cause actual future activities and results to be materially
different from those suggested or described in this news
release. These include risks inherent in natural gas and oil
drilling and production activities, including risks with respect to
continued low or further declining prices for natural gas and
oil that could result in further downward revisions to the
value of proved reserves or otherwise cause Gastar to further delay
or suspend planned drilling and completion operations or reduce
production levels which would adversely impact cash flow; risks
relating to the availability of capital to fund drilling operations
that can be adversely affected by adverse drilling results,
production declines and continued low or further declining prices
for natural gas and oil; risks regarding Gastar's ability to meet
financial covenants under its indenture or credit agreements or the
ability to obtain amendments or waivers to effect such compliance;
risks of fire, explosion, blowouts, pipe failure, casing collapse,
unusual or unexpected formation pressures, environmental hazards,
and other operating and production risks, which may temporarily or
permanently reduce production or cause initial production or test
results to not be indicative of future well performance or delay
the timing of sales or completion of drilling operations; delays in
receipt of drilling permits; risks relating to unexpected adverse
developments in the status of properties; borrowing base
redeterminations by our banks; risks relating to the absence or
delay in receipt of government approvals or third-party consents;
risks relating to our ability to integrate acquired assets with
ours and to realize the anticipated benefits from such
acquisitions; and other risks described in Gastar's Annual Report
on Form 10-K, Quarterly Reports on Form 10-Q and other filings with
the SEC, available at the SEC's website at www.sec.gov. Our
actual sales production rates can vary considerably from tested
initial production rates depending upon completion and production
techniques and our primary areas of operations are subject to
natural steep decline rates. By issuing forward looking statements
based on current expectations, opinions, views or beliefs, Gastar
has no obligation and, except as required by law, is not
undertaking any obligation, to update or revise these statements or
provide any other information relating to such statements.
Targeted expectations and guidance for the third quarter and
full year of 2016 are based upon the current 2016 planned capital
expenditures budget, which may be subject to revision and
reevaluation dependent upon future developments, including drilling
results, our liquidity position, a further decline in commodity
prices, availability of crews, supplies and production capacity,
weather delays and significant changes in drilling costs.
Unless otherwise stated herein, equivalent volumes of production
and reserves are based upon an energy equivalent ratio of six Mcf
of natural gas to each barrel of liquids (oil, condensate and
NGLs), which ratio is not reflective of relative value. Our
NGLs are sold as part of our wet gas subject to an incremental NGLs
pricing formula based upon a percentage of NGLs extracted from our
wet gas production. Our reported production volumes reflect
incremental post-processing NGLs volumes and residual gas volumes
with which we are credited under our sales contracts.
Contacts:
Gastar Exploration Inc.
Michael A. Gerlich, Chief Financial
Officer
713-739-1800 / mgerlich@gastar.com
Investor Relations Counsel:
Lisa Elliott, Dennard▪Lascar
Associates:
713-529-6600 / lelliott@DennardLascar.com
– Financial Tables Follow –
GASTAR EXPLORATION
INC.
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|
|
|
For the Three
Months Ended
June 30,
|
|
|
For the Six Months
Ended
June 30,
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
|
|
(in thousands,
except share and per share data)
|
|
REVENUES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil and
condensate
|
|
$
|
11,345
|
|
|
$
|
17,584
|
|
|
$
|
20,158
|
|
|
$
|
32,937
|
|
Natural gas
|
|
|
1,876
|
|
|
|
3,950
|
|
|
|
5,894
|
|
|
|
10,650
|
|
NGLs
|
|
|
1,710
|
|
|
|
2,184
|
|
|
|
3,405
|
|
|
|
4,280
|
|
Total oil, condensate,
natural gas and NGLs revenues
|
|
|
14,931
|
|
|
|
23,718
|
|
|
|
29,457
|
|
|
|
47,867
|
|
(Loss) gain on
commodity derivatives contracts
|
|
|
(2,778)
|
|
|
|
(1,790)
|
|
|
|
(2,493)
|
|
|
|
8,433
|
|
Total
revenues
|
|
|
12,153
|
|
|
|
21,928
|
|
|
|
26,964
|
|
|
|
56,300
|
|
EXPENSES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production
taxes
|
|
|
364
|
|
|
|
822
|
|
|
|
1,069
|
|
|
|
1,662
|
|
Lease operating
expenses
|
|
|
4,584
|
|
|
|
7,242
|
|
|
|
10,663
|
|
|
|
13,261
|
|
Transportation,
treating and gathering
|
|
|
395
|
|
|
|
542
|
|
|
|
1,008
|
|
|
|
1,039
|
|
Depreciation,
depletion and amortization
|
|
|
5,591
|
|
|
|
16,080
|
|
|
|
19,320
|
|
|
|
30,551
|
|
Impairment of oil and
natural gas properties
|
|
|
—
|
|
|
|
100,152
|
|
|
|
48,497
|
|
|
|
100,152
|
|
Accretion of asset
retirement obligation
|
|
|
89
|
|
|
|
131
|
|
|
|
194
|
|
|
|
256
|
|
General and
administrative expense
|
|
|
6,272
|
|
|
|
4,421
|
|
|
|
11,947
|
|
|
|
8,669
|
|
Total
expenses
|
|
|
17,295
|
|
|
|
129,390
|
|
|
|
92,698
|
|
|
|
155,590
|
|
LOSS FROM
OPERATIONS
|
|
|
(5,142)
|
|
|
|
(107,462)
|
|
|
|
(65,734)
|
|
|
|
(99,290)
|
|
OTHER INCOME
(EXPENSE):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
(9,263)
|
|
|
|
(6,936)
|
|
|
|
(18,561)
|
|
|
|
(14,497)
|
|
Investment income and
other
|
|
|
(76)
|
|
|
|
3
|
|
|
|
(43)
|
|
|
|
6
|
|
LOSS BEFORE PROVISION
FOR INCOME TAXES
|
|
|
(14,481)
|
|
|
|
(114,395)
|
|
|
|
(84,338)
|
|
|
|
(113,781)
|
|
Provision for income
taxes
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
NET LOSS
|
|
|
(14,481)
|
|
|
|
(114,395)
|
|
|
|
(84,338)
|
|
|
|
(113,781)
|
|
Dividends on
preferred stock
|
|
|
(3,619)
|
|
|
|
(3,619)
|
|
|
|
(7,237)
|
|
|
|
(7,237)
|
|
NET LOSS ATTRIBUTABLE
TO COMMON STOCKHOLDERS
|
|
$
|
(18,100)
|
|
|
$
|
(118,014)
|
|
|
$
|
(91,575)
|
|
|
$
|
(121,018)
|
|
NET LOSS PER SHARE OF
COMMON STOCK ATTRIBUTABLE TO COMMON STOCKHOLDERS:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.17)
|
|
|
$
|
(1.52)
|
|
|
$
|
(1.00)
|
|
|
$
|
(1.56)
|
|
Diluted
|
|
$
|
(0.17)
|
|
|
$
|
(1.52)
|
|
|
$
|
(1.00)
|
|
|
$
|
(1.56)
|
|
WEIGHTED AVERAGE
SHARES OF COMMON STOCK OUTSTANDING:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
104,009,337
|
|
|
|
77,611,167
|
|
|
|
91,398,735
|
|
|
|
77,364,368
|
|
Diluted
|
|
|
104,009,337
|
|
|
|
77,611,167
|
|
|
|
91,398,735
|
|
|
|
77,364,368
|
|
GASTAR EXPLORATION
INC.
|
CONSOLIDATED
BALANCE SHEETS
|
|
|
|
June
30,
|
|
|
December
31,
|
|
|
|
2016
|
|
|
2015
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
(in thousands,
except share data)
|
|
ASSETS
|
|
|
|
|
|
|
|
|
CURRENT
ASSETS:
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
50,761
|
|
|
$
|
50,074
|
|
Accounts receivable,
net of allowance for doubtful accounts of $1,953 and $0,
respectively
|
|
|
7,324
|
|
|
|
14,302
|
|
Commodity derivative
contracts
|
|
|
7,729
|
|
|
|
15,534
|
|
Prepaid
expenses
|
|
|
4,881
|
|
|
|
5,056
|
|
Total current
assets
|
|
|
70,695
|
|
|
|
84,966
|
|
PROPERTY, PLANT AND
EQUIPMENT:
|
|
|
|
|
|
|
|
|
Oil and natural gas
properties, full cost method of accounting:
|
|
|
|
|
|
|
|
|
Unproved properties,
excluded from amortization
|
|
|
87,727
|
|
|
|
92,609
|
|
Proved
properties
|
|
|
1,239,324
|
|
|
|
1,286,373
|
|
Total oil and natural
gas properties
|
|
|
1,327,051
|
|
|
|
1,378,982
|
|
Furniture and
equipment
|
|
|
2,613
|
|
|
|
3,068
|
|
Total property, plant
and equipment
|
|
|
1,329,664
|
|
|
|
1,382,050
|
|
Accumulated
depreciation, depletion and amortization
|
|
|
(1,120,659)
|
|
|
|
(1,053,116)
|
|
Total property, plant
and equipment, net
|
|
|
209,005
|
|
|
|
328,934
|
|
OTHER
ASSETS:
|
|
|
|
|
|
|
|
|
Commodity derivative
contracts
|
|
|
5,223
|
|
|
|
9,335
|
|
Deferred charges,
net
|
|
|
743
|
|
|
|
985
|
|
Advances to operators
and other assets
|
|
|
561
|
|
|
|
331
|
|
Other
|
|
|
1,121
|
|
|
|
4,944
|
|
Total other
assets
|
|
|
7,648
|
|
|
|
15,595
|
|
TOTAL
ASSETS
|
|
$
|
287,348
|
|
|
$
|
429,495
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
2,887
|
|
|
$
|
2,029
|
|
Revenue
payable
|
|
|
5,975
|
|
|
|
5,985
|
|
Accrued
interest
|
|
|
3,512
|
|
|
|
3,730
|
|
Accrued drilling and
operating costs
|
|
|
2,766
|
|
|
|
2,010
|
|
Advances from
non-operators
|
|
|
5
|
|
|
|
167
|
|
Commodity derivative
contracts
|
|
|
170
|
|
|
|
—
|
|
Commodity derivative
premium payable
|
|
|
1,660
|
|
|
|
3,194
|
|
Asset retirement
obligation
|
|
|
89
|
|
|
|
89
|
|
Other accrued
liabilities
|
|
|
6,748
|
|
|
|
6,764
|
|
Total current
liabilities
|
|
|
23,812
|
|
|
|
23,968
|
|
LONG-TERM
LIABILITIES:
|
|
|
|
|
|
|
|
|
Long-term
debt
|
|
|
417,765
|
|
|
|
516,476
|
|
Commodity derivative
contracts
|
|
|
—
|
|
|
|
451
|
|
Commodity derivative
premium payable
|
|
|
1,886
|
|
|
|
2,788
|
|
Asset retirement
obligation
|
|
|
5,586
|
|
|
|
5,997
|
|
Total long-term
liabilities
|
|
|
425,237
|
|
|
|
525,712
|
|
Commitments and
contingencies (Note 11)
|
|
|
|
|
|
|
|
|
STOCKHOLDERS'
EQUITY:
|
|
|
|
|
|
|
|
|
Preferred stock,
40,000,000 shares authorized
|
|
|
|
|
|
|
|
|
Series A Preferred
stock, par value $0.01 per share; 10,000,000 shares
designated; 4,045,000 shares
issued and outstanding at June 30, 2016 and December 31, 2015,
respectively, with liquidation preference of $25.00 per
share
|
|
|
41
|
|
|
|
41
|
|
Series B Preferred
stock, par value $0.01 per share; 10,000,000 shares
designated; 2,140,000 shares
issued and outstanding at June 30, 2016 and December 31, 2015,
respectively, with liquidation preference of $25.00 per
share
|
|
|
21
|
|
|
|
21
|
|
Common stock, par
value $0.001 per share; 550,000,000 and 275,000,000 shares
authorized at June 30, 2016 and December 31, 2015, respectively;
131,728,879 and 80,024,218 shares issued and outstanding at June
30, 2016 and December 31, 2015, respectively
|
|
|
132
|
|
|
|
80
|
|
Additional paid-in
capital
|
|
|
621,954
|
|
|
|
571,947
|
|
Accumulated
deficit
|
|
|
(783,849)
|
|
|
|
(692,274)
|
|
Total stockholders'
equity
|
|
|
(161,701)
|
|
|
|
(120,185)
|
|
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
$
|
287,348
|
|
|
$
|
429,495
|
|
GASTAR EXPLORATION
INC.
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
|
|
For the Six Months
Ended June 30,
|
|
|
|
2016
|
|
|
2015
|
|
|
|
(in
thousands)
|
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(84,338)
|
|
|
$
|
(113,781)
|
|
Adjustments to
reconcile net loss to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
Depreciation,
depletion and amortization
|
|
|
19,320
|
|
|
|
30,551
|
|
Impairment of oil and
natural gas properties
|
|
|
48,497
|
|
|
|
100,152
|
|
Stock-based
compensation
|
|
|
2,335
|
|
|
|
2,773
|
|
Mark to market of
commodity derivatives contracts:
|
|
|
|
|
|
|
|
|
Total loss (gain) on
commodity derivatives contracts
|
|
|
2,493
|
|
|
|
(8,433)
|
|
Cash settlements of
matured commodity derivatives contracts, net
|
|
|
9,581
|
|
|
|
11,408
|
|
Cash premiums paid for
commodity derivatives contracts
|
|
|
(565)
|
|
|
|
(45)
|
|
Amortization of
deferred financing costs
|
|
|
2,825
|
|
|
|
1,736
|
|
Accretion of asset
retirement obligation
|
|
|
194
|
|
|
|
256
|
|
Settlement of asset
retirement obligation
|
|
|
—
|
|
|
|
(80)
|
|
Loss on sale of furniture and
equipment
|
|
|
97
|
|
|
|
—
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
4,260
|
|
|
|
15,887
|
|
Prepaid
expenses
|
|
|
175
|
|
|
|
1,397
|
|
Accounts payable and
accrued liabilities
|
|
|
570
|
|
|
|
(4,806)
|
|
Net cash provided by
operating activities
|
|
|
5,444
|
|
|
|
37,015
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
Development and
purchase of oil and natural gas properties
|
|
|
(23,370)
|
|
|
|
(84,724)
|
|
Advances to
operators
|
|
|
(69)
|
|
|
|
(1,225)
|
|
Acquisition of oil and
natural gas properties - refund
|
|
|
1,664
|
|
|
|
—
|
|
Proceeds from sale of
oil and natural gas properties
|
|
|
77,621
|
|
|
|
2,008
|
|
Deposit for sale of
oil and natural gas properties
|
|
|
—
|
|
|
|
6,620
|
|
Payments to
non-operators
|
|
|
(162)
|
|
|
|
(1,820)
|
|
Sale (purchase) of
furniture and equipment
|
|
|
82
|
|
|
|
(45)
|
|
Net cash provided by
(used in) investing activities
|
|
|
55,766
|
|
|
|
(79,186)
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
Proceeds from
revolving credit facility
|
|
|
—
|
|
|
|
55,000
|
|
Repayment of revolving
credit facility
|
|
|
(100,370)
|
|
|
|
(5,000)
|
|
Proceeds from issuance
of common stock, net of issuance costs
|
|
|
45,069
|
|
|
|
—
|
|
Dividends on preferred
stock
|
|
|
(3,618)
|
|
|
|
(7,237)
|
|
Deferred financing
charges
|
|
|
(893)
|
|
|
|
(797)
|
|
Tax withholding
related to restricted stock and performance based unit award
vestings
|
|
|
(711)
|
|
|
|
(1,425)
|
|
Net cash (used in)
provided by financing activities
|
|
|
(60,523)
|
|
|
|
40,541
|
|
NET INCREASE
(DECREASE) IN CASH AND CASH EQUIVALENTS
|
|
|
687
|
|
|
|
(1,630)
|
|
CASH AND CASH
EQUIVALENTS, BEGINNING OF PERIOD
|
|
|
50,074
|
|
|
|
11,008
|
|
CASH AND CASH
EQUIVALENTS, END OF PERIOD
|
|
$
|
50,761
|
|
|
$
|
9,378
|
|
NON-GAAP FINANCIAL INFORMATION AND
RECONCILIATION
We use both GAAP and certain non-GAAP financial measures to
assess performance. Generally, a non-GAAP financial measure
is a numerical measure of a company's performance, financial
position or cash flows that either excludes or includes amounts
that are not normally excluded or included in the most directly
comparable measure calculated and presented in accordance with
GAAP. Our management believes that these non-GAAP measures
provide useful supplemental information to investors in order that
they may evaluate our financial performance using the same measures
as management. These non-GAAP financial measures should not
be considered as a substitute for, or superior to, measures of
financial performance prepared in accordance with GAAP. In
evaluating these measures, investors should consider that the
methodology applied in calculating such measures may differ among
companies and analysts. A reconciliation is provided below
outlining the differences between these non-GAAP measures and their
most directly comparable financial measure calculated in accordance
with GAAP.
Reconciliation of
Net Loss to Net Loss Excluding Special Items:
|
|
|
|
For the Three
Months Ended
June 30,
|
|
|
For the Six Months
Ended
June 30,
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
|
|
(in thousands,
except share and per share data)
|
|
NET LOSS ATTRIBUTABLE
TO COMMON STOCKHOLDERS
|
|
$
|
(18,100)
|
|
|
$
|
(118,014)
|
|
|
$
|
(91,575)
|
|
|
$
|
(121,018)
|
|
SPECIAL
ITEMS:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Losses related to the
change in mark to market value for outstanding commodity
derivatives contracts
|
|
|
3,343
|
|
|
|
7,777
|
|
|
|
9,840
|
|
|
|
3,525
|
|
Impairment of oil and
natural gas properties
|
|
|
—
|
|
|
|
100,152
|
|
|
|
48,497
|
|
|
|
100,152
|
|
Non-recurring general
and administrative costs related to acquisition of
assets
|
|
|
124
|
|
|
|
—
|
|
|
|
399
|
|
|
|
—
|
|
Non-recurring
severance costs related to property divestments
|
|
|
140
|
|
|
|
—
|
|
|
|
677
|
|
|
|
—
|
|
Allowance for bad
debt
|
|
|
1,953
|
|
|
|
—
|
|
|
|
1,953
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADJUSTED NET LOSS
ATTRIBUTABLE TO COMMON STOCKHOLDERS
|
|
$
|
(12,540)
|
|
|
$
|
(10,085)
|
|
|
$
|
(30,209)
|
|
|
$
|
(17,341)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADJUSTED NET LOSS PER
SHARE OF COMMON STOCK ATTRIBUTABLE TO COMMON
STOCKHOLDERS:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.12)
|
|
|
$
|
(0.13)
|
|
|
$
|
(0.33)
|
|
|
$
|
(0.22)
|
|
Diluted
|
|
$
|
(0.12)
|
|
|
$
|
(0.13)
|
|
|
$
|
(0.33)
|
|
|
$
|
(0.22)
|
|
WEIGHTED AVERAGE
SHARES OF COMMON STOCK
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
104,009,337
|
|
|
|
77,611,167
|
|
|
|
91,398,735
|
|
|
|
77,364,368
|
|
Diluted
|
|
|
104,009,337
|
|
|
|
77,611,167
|
|
|
|
91,398,735
|
|
|
|
77,364,368
|
|
Reconciliation of
Cash Flows before Working Capital Changes
|
and as
Adjusted for Special Items:
|
|
|
|
For the Three
Months Ended
June 30,
|
|
|
For the Six Months
Ended
June 30,
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
|
|
(in thousands,
except share and per share data)
|
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(14,481)
|
|
|
$
|
(114,395)
|
|
|
$
|
(84,338)
|
|
|
$
|
(113,781)
|
|
Adjustments to
reconcile net loss to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation,
depletion and amortization
|
|
|
5,591
|
|
|
|
16,080
|
|
|
|
19,320
|
|
|
|
30,551
|
|
Impairment of oil and
natural gas properties
|
|
|
—
|
|
|
|
100,152
|
|
|
|
48,497
|
|
|
|
100,152
|
|
Stock-based
compensation
|
|
|
702
|
|
|
|
1,247
|
|
|
|
2,335
|
|
|
|
2,773
|
|
Mark to market of
commodity derivatives contracts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total loss (gain) on
commodity derivatives contracts
|
|
|
2,778
|
|
|
|
1,790
|
|
|
|
2,493
|
|
|
|
(8,433)
|
|
Cash settlements of
matured commodity derivatives contracts, net
|
|
|
1,423
|
|
|
|
6,131
|
|
|
|
9,581
|
|
|
|
11,408
|
|
Cash premiums paid for
commodity derivatives contracts
|
|
|
(565)
|
|
|
|
(45)
|
|
|
|
(565)
|
|
|
|
(45)
|
|
Amortization of
deferred financing costs
|
|
|
1,835
|
|
|
|
914
|
|
|
|
2,825
|
|
|
|
1,736
|
|
Accretion of asset
retirement obligation
|
|
|
89
|
|
|
|
131
|
|
|
|
194
|
|
|
|
256
|
|
Settlement of asset
retirement obligation
|
|
|
—
|
|
|
|
(80)
|
|
|
|
—
|
|
|
|
(80)
|
|
Loss on sale of
assets
|
|
|
97
|
|
|
|
—
|
|
|
|
97
|
|
|
|
—
|
|
Cash flows from
operations before working capital changes
|
|
|
(2,531)
|
|
|
|
11,925
|
|
|
|
439
|
|
|
|
24,537
|
|
Dividends on preferred
stock
|
|
|
—
|
|
|
|
(3,619)
|
|
|
|
(3,618)
|
|
|
|
(7,237)
|
|
Non-recurring general
and administrative costs related to acquisition of
assets
|
|
|
124
|
|
|
|
—
|
|
|
|
399
|
|
|
|
—
|
|
Non-recurring
severance costs related to property divestments
|
|
|
140
|
|
|
|
—
|
|
|
|
677
|
|
|
|
—
|
|
Allowance for bad
debt
|
|
|
1,953
|
|
|
|
—
|
|
|
|
1,953
|
|
|
|
—
|
|
Adjusted cash flows
from operations
|
|
$
|
(314)
|
|
|
$
|
8,306
|
|
|
$
|
(150)
|
|
|
$
|
17,300
|
|
Reconciliation of
Net Loss to Adjusted Earnings Before Interest, Income Taxes,
Depreciation, Depletion
|
and Amortization
("Adjusted EBITDA"):
|
|
|
|
For the Three
Months Ended
June 30,
|
|
|
For the Six Months
Ended
June 30,
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
|
|
(in thousands,
except share and per share data)
|
|
NET LOSS ATTRIBUTABLE
TO COMMON STOCKHOLDERS
|
|
$
|
(18,100)
|
|
|
$
|
(118,014)
|
|
|
$
|
(91,575)
|
|
|
$
|
(121,018)
|
|
Interest
expense
|
|
|
9,263
|
|
|
|
6,936
|
|
|
|
18,561
|
|
|
|
14,497
|
|
Depreciation,
depletion and amortization
|
|
|
5,591
|
|
|
|
16,080
|
|
|
|
19,320
|
|
|
|
30,551
|
|
Impairment of oil and
natural gas properties
|
|
|
—
|
|
|
|
100,152
|
|
|
|
48,497
|
|
|
|
100,152
|
|
EBITDA
|
|
|
(3,246)
|
|
|
|
5,154
|
|
|
|
(5,197)
|
|
|
|
24,182
|
|
Dividends on preferred
stock
|
|
|
3,619
|
|
|
|
3,619
|
|
|
|
7,237
|
|
|
|
7,237
|
|
Accretion of asset
retirement obligation
|
|
|
89
|
|
|
|
131
|
|
|
|
194
|
|
|
|
256
|
|
Losses related to the
change in mark to market value for outstanding commodity
derivatives contracts
|
|
|
3,343
|
|
|
|
7,777
|
|
|
|
9,840
|
|
|
|
3,525
|
|
Non-cash stock
compensation expense
|
|
|
702
|
|
|
|
1,247
|
|
|
|
2,335
|
|
|
|
2,773
|
|
Investment income and
other
|
|
|
76
|
|
|
|
(3)
|
|
|
|
43
|
|
|
|
(6)
|
|
Non-recurring general
and administrative costs related to acquisition of
assets
|
|
|
124
|
|
|
|
—
|
|
|
|
399
|
|
|
|
—
|
|
Non-recurring
severance costs related to property divestments
|
|
|
140
|
|
|
|
—
|
|
|
|
677
|
|
|
|
—
|
|
Allowance for bad
debt
|
|
|
1,953
|
|
|
|
—
|
|
|
|
1,953
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
$
|
6,800
|
|
|
$
|
17,925
|
|
|
$
|
17,481
|
|
|
$
|
37,967
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/gastar-exploration-announces-second-quarter-2016-results-300309559.html
SOURCE Gastar Exploration Inc.