Rex Energy Corporation (Nasdaq:REXX) today announced its third
quarter 2016 operational and financial results.
Third 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 nine months ended September 30, 2016 was $34.0
million and $91.0 million, respectively, which represents an
increase of 15% and a decrease of 18% over the same periods in
2015. Commodity revenues, including settlements from derivatives,
for the three and nine months ended September 30, 2016 were $36.3
million and $123.7 million, a decrease of 19% and 18% for the same
periods in 2015, respectively. Commodity revenues from condensate
and natural gas liquids (NGLs), including settlements from
derivatives, represented 50% of total commodity revenues for the
three months ended September 30, 2016.
Lease operating expense (LOE) from continuing
operations was $26.3 million, or $1.45 per Mcfe for the quarter.
For the nine months ended September 30, 2016, LOE was approximately
$76.0 million, or $1.42 per Mcfe. General and administrative
expenses from continuing operations were $5.1 million for the third
quarter of 2016, a 4% increase 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 $4.1 million
for the third quarter of 2016, an 18% decrease on a per unit basis
as compared to the same period in 2015. For the nine months ended
September 30, 2016, G&A expenses from continuing operations
were $15.2 million, a 30% decrease on a per unit basis as compared
to the same period in 2015. Cash G&A expenses from continuing
operations were $13.2 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 September 30, 2016 was $4.8 million, or
$0.05 per basic share. Net loss attributable to common shareholders
for the nine months ended September 30, 2016 was $41.4 million, or
$0.57 per basic share. Adjusted net loss, a non-GAAP measure, for
the three months ended September 30, 2016 was $12.3 million, or
$0.14 per share. Adjusted net loss for the nine months ended
September 30, 2016 was $29.7 million, or $0.41 per share.
EBITDAX from continuing operations, a non-GAAP
measure, was $4.5 million for the third quarter of 2016 and $32.0
million for the nine months ended September 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 nine months ended September 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
Third quarter 2016 production volumes from
continuing operations were 197.8 MMcfe/d, an increase of 8% over
the third quarter of 2015, consisting of 118.8 MMcf/d of natural
gas and 13.2 Mboe/d of condensate and NGLs (including 6.6 Mboe/d of
ethane). Condensate and NGLs (including ethane) accounted for 40%
of net production for the third quarter of 2016.
Including the effects of cash-settled derivatives,
realized prices for the three months ended September 30, 2016 were
$1.65 per Mcf for natural gas, $39.70 per barrel for condensate,
$18.15 per barrel for NGLs (C3+) and $8.15 per barrel for ethane.
Before the effects of hedging, realized prices for the three months
ended September 30, 2016 were $1.54 per Mcf for natural gas, $38.82
per barrel for condensate, $16.48 per barrel for NGLs (C3+) and
$7.99 per barrel for ethane. Third quarter 2016 price realizations
were negatively impacted by the early termination of hedges during
the second quarter of 2016.
Including the effects of cash-settled derivatives,
realized prices for the nine months ended September 30, 2016 were
$2.17 per Mcf for natural gas, $43.18 per barrel for condensate,
$18.78 per barrel for NGLs (C3+) and $7.43 per barrel for ethane.
Before the effects of hedging, realized prices for the nine months
ended September 30, 2016 were $1.44 per Mcf for natural gas, $34.72
per barrel for condensate, $14.74 per barrel for NGLs (C3+) and
$7.28 per barrel for ethane.
Third Quarter 2016 Capital
Investments
For the third quarter of 2016, net operational
capital investments were approximately $10.9 million. The company
expects to be reimbursed by joint venture partners for
approximately $11.8 million of previously incurred costs that were
not billed until the fourth quarter. These capital investments
funded the drilling of four gross (1.4 net) wells, fracture
stimulation of three gross (1.8 net) wells, placing four gross (2.1
net) wells into sales and other projects related to drilling and
completing wells in the Appalachian Basin.
Third quarter investments for leasing and property
acquisitions were $0.4 million and capitalized interest was $0.3
million.
Operational Update
Appalachian Basin – Legacy Butler Operated Area
During the third quarter of 2016, the company
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 wells produced
at an average 5-day sales rate per well, assuming full ethane
recovery, of 6.1 MMcfe/d, consisting of 3.8 MMcf/d of gas and 387
bbls/d of NGLs.
Appalachian Basin – Moraine East Area
In the Moraine East Area, Rex Energy drilled one
gross (0.4 net) well during the third quarter of 2016. In addition,
the company had six gross (2.1 net) wells awaiting completion at
the end of the third quarter.
During the third quarter of 2016, the company
placed the four-well Fleeger II pad into sales, consisting of three
Marcellus wells and one Upper Devonian well. The Fleeger II wells
were drilled to an average lateral length of approximately 7,760
feet and completed in an average of 46 stages with average sand
concentrations of 2,444 pounds per foot. The three Marcellus wells
produced at an average 24-hour sales rate per well, assuming full
ethane recovery, of 10.4 MMcfe/d, consisting of 4.3 MMcf/d of
natural gas, 851 bbls/d of NGLs and 154 bbls/d of condensate. The
Upper Devonian Burkett well, the Fleeger II 3H, produced at a
24-hour sales rate of 7.0 MMcfe/d, consisting of 2.9 MMcf/d of
natural gas, 557 bbls/d of NGLs and 133 bbls/d of condensate. The
Fleeger II 3H has not fully dewatered and is continuing to improve
as it cleans up.
The company recently completed the two-well Klever
pad, which was drilled to an average lateral length of
approximately 7,460 feet. The pad is expected to be placed into
sales during the fourth quarter of 2016. The company also expects
to complete the four-well Baird pad in the fourth quarter of 2016
and place the pad into sales in January 2016. Horizontal drilling
has started on the six-well Shields pad, which is expected to have
an average lateral length of approximately 7,750 feet. The Shields
pad is expected to be placed into sales in the second quarter of
2017.
Appalachian Basin – Warrior North Area – Carroll
County, Ohio
In the Warrior North Area, Rex Energy drilled 3.5
gross (1.2 net) wells during the third quarter of 2016. The company
is currently completing the four-well Vaughn pad, which was drilled
to an average lateral length of approximately 7,200 feet. The
Vaughn pad is expected to be placed into sales in December
2016.
Appalachian Basin – Year to Date HBP /
Production
Rex Energy continues to focus its development
efforts in its core areas of the Appalachian Basin. The table below
provides the company’s projections for assets held by production to
date and by year-end 2016, with associated potential future
drilling locations and exit rate estimates.
|
|
Moraine East |
Warrior North |
|
|
YE 2016E |
YTD |
YE 2016E |
|
Total Acreage HBP |
|
22,000 |
|
|
6,700 |
|
|
11,800 |
|
|
% Acreage HBP |
|
61 |
% |
|
56 |
% |
|
98 |
% |
|
Gross / Net Locations HBP |
217 / 184 |
40 / 32 |
54 / 46 |
|
% Gross / Net Locations HBP |
56% / 56% |
68% / 63% |
92% / 90% |
|
Gross Exit Rate Production |
69.1 MMcfe/d |
-- |
67.6 MMcfe/d |
Appalachian Basin – Marketing Update
On November 1, 2016, Rex Energy began transporting
130 MMbtu/d of natural gas volumes from its Butler Operated Area to
the Gulf Coast and Midwest markets. The commencement of this
transportation allows the company to access premium markets in the
Midwest and the Gulf Coast, including the future Freeport LNG
export facilities, where the company will receive Henry Hub pricing
at a minimal discount. Rex Energy expects to transport
approximately 50% of its natural gas volumes to these markets. With
Gulf Coast transportation in place for full-year 2017, the company
expects its overall basis differential to improve by approximately
50% over its full-year 2016 basis differential.
Earlier this year, Rex Energy began selling ethane
from the Butler Operated and Warrior North Areas on Mariner East
out of the Marcus Hook facility. The access to international
markets has resulted in the company receiving a premium to Mont.
Belvieu pricing.
During the second half of 2016, the company
renegotiated its condensate pricing agreements, resulting in over
$5.00/bbl incremental value in condensate pricing.
Liquidity Update
During the third quarter, Rex Energy completed the
sale of its Illinois Basin assets for approximately $40 million and
the company’s bank group reaffirmed the $190 million borrowing base
under the its senior secured credit facility.
Projections for Operations; Fourth Quarter
and Full Year 2016 Guidance
The following table summarizes Rex Energy’s
operational activities for full-year 2016 and projected status at
year-end in each of its core operating areas:
|
|
Legacy Butler |
Moraine East |
Warrior North |
|
Wells Drilled Gross / Net |
2.0 / 1.4 |
10.0 / 3.5 |
7.0 / 2.5 |
|
Wells Completed Gross / Net |
2.0 / 1.4 |
6.0 / 2.7 |
10.0 / 4.2 |
|
Wells Placed Into Sales Gross / Net |
2.0 / 1.4 |
18.0 / 8.7 |
13.0 / 5.2 |
|
Commenced Pad Operations (@ YE) |
-- |
3.0 pads |
-- |
In addition, the company is providing its guidance
for the fourth quarter of 2016 and full-year 2016 ($ in
millions):
|
|
4Q2016 |
Full Year 2016 |
|
Production |
194.0 – 200.0 MMcfe/d |
7% YoY Growth |
|
Lease Operating Expense |
$28.0 - $31.0 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, November 9, 2016 at 10:00 a.m. Eastern to
review third 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; projections of operations at
year-end 2016; and our financial guidance for fourth 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 |
|
September 30,
2016(Unaudited) |
|
December 31, 2015 |
|
Current Assets |
|
|
|
|
| Cash and Cash Equivalents |
|
$ |
2,524 |
|
|
$ |
1,091 |
|
| Accounts Receivable |
|
|
21,655 |
|
|
|
17,274 |
|
| Taxes Receivable |
|
|
211 |
|
|
|
18 |
|
| Short-Term Derivative
Instruments |
|
|
5,461 |
|
|
|
34,260 |
|
| Inventory, Prepaid Expenses and
Other |
|
|
1,079 |
|
|
|
3,059 |
|
| Assets Held for Sale |
|
|
-- |
|
|
|
60,451 |
|
| Total Current
Assets |
|
|
30,930 |
|
|
|
116,153 |
|
|
Property and Equipment (Successful Efforts
Method) |
|
|
|
|
|
|
|
|
| Evaluated Oil and Gas
Properties |
|
|
1,020,993 |
|
|
|
943,092 |
|
| Unevaluated Oil and Gas
Properties |
|
|
223,791 |
|
|
|
262,992 |
|
| Other Property and Equipment |
|
|
21,449 |
|
|
|
20,363 |
|
| Wells and Facilities in
Progress |
|
|
66,614 |
|
|
|
141,100 |
|
| Pipelines |
|
|
15,186 |
|
|
|
14,024 |
|
| Total Property and
Equipment |
|
|
1,348,033 |
|
|
|
1,381,571 |
|
| Less: Accumulated Depreciation,
Depletion and Amortization |
|
|
(459,549 |
) |
|
|
(437,828 |
) |
| Net Property and
Equipment |
|
|
888,484 |
|
|
|
943,743 |
|
| Other Assets |
|
|
2,492 |
|
|
|
2,501 |
|
| Long-Term Derivative
Instruments |
|
|
3,367 |
|
|
|
9,534 |
|
|
Total Assets |
|
$ |
925,273 |
|
|
$ |
1,071,931 |
|
|
LIABILITIES AND EQUITY |
|
|
|
|
|
Current Liabilities |
|
|
|
|
| Accounts Payable |
|
$ |
29,464 |
|
|
$ |
36,785 |
|
| Current Maturities of Long-Term
Debt |
|
|
201 |
|
|
|
402 |
|
| Accrued Liabilities |
|
|
29,619 |
|
|
|
40,608 |
|
| Short-Term Derivative
Instruments |
|
|
9,294 |
|
|
|
2,486 |
|
| Liabilities Related to Assets Held
for Sale |
|
|
631 |
|
|
|
36,320 |
|
| Total Current
Liabilities |
|
|
69,209 |
|
|
|
116,601 |
|
| Long-Term Derivative
Instruments |
|
|
3,354 |
|
|
|
5,556 |
|
| Senior Secured Line of Credit and
Long-Term Debt, Net of Issuance Costs |
|
|
126,061 |
|
|
|
109,386 |
|
| Senior Notes, Net of Issuance Costs
and Deferred Gain on Debt Exchanges |
|
|
633,322 |
|
|
|
663,089 |
|
| Premium on Senior Notes, Net |
|
|
134 |
|
|
|
2,344 |
|
| Other Deposits and Liabilities |
|
|
9,617 |
|
|
|
3,156 |
|
| Future Abandonment Cost |
|
|
7,438 |
|
|
|
11,568 |
|
|
Total Liabilities |
|
$ |
849,135 |
|
|
$ |
911,700 |
|
|
|
|
|
|
|
|
Stockholder Equity |
|
|
|
|
| Preferred Stock, $.001 par value
per share, 100,000 shares authorized and 4,087 issued and
outstanding on September 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 95,886,983 shares issued
and outstanding on September 30, 2016 and 55,741,229 shares issued
and outstanding on December 31, 2015 |
|
|
94 |
|
|
|
54 |
|
| Additional Paid-In Capital |
|
|
649,103 |
|
|
|
623,863 |
|
| Accumulated Deficit |
|
|
(573,060 |
) |
|
|
(463,687 |
) |
| Total Stockholders’
Equity |
|
|
76,138 |
|
|
|
160,231 |
|
|
Total Liabilities and Owners’ Equity |
|
$ |
925,273 |
|
|
$ |
1,071,931 |
|
| |
|
|
|
|
|
|
|
|
| REX ENERGY
CORPORATION |
| CONSOLIDATED
STATEMENTS OF OPERATIONS |
| (Unaudited, in
Thousands, Except per Share Data) |
| |
| |
|
For the
Three Months Ended September 30, |
|
For the
Nine Months EndedSeptember 30, |
| |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
OPERATING REVENUE |
|
|
|
|
|
|
|
|
| Natural Gas, Condensate and NGL
Sales |
|
$ |
34,034 |
|
|
$ |
29,648 |
|
|
$ |
90,978 |
|
|
$ |
111,344 |
|
| Other Revenue |
|
|
5 |
|
|
|
8 |
|
|
|
12 |
|
|
|
30 |
|
| TOTAL OPERATING
REVENUE |
|
|
34,039 |
|
|
|
29,656 |
|
|
|
90,990 |
|
|
|
111,374 |
|
|
OPERATING EXPENSES |
|
|
|
|
|
|
|
|
| Production and Lease Operating
Expense |
|
|
26,333 |
|
|
|
24,259 |
|
|
|
76,005 |
|
|
|
71,646 |
|
| General and Administrative
Expense |
|
|
5,116 |
|
|
|
4,507 |
|
|
|
15,237 |
|
|
|
20,253 |
|
| (Gain) Loss on Disposal of
Assets |
|
|
10 |
|
|
|
(224 |
) |
|
|
(4,285 |
) |
|
|
(533 |
) |
| Impairment Expense |
|
|
9,563 |
|
|
|
85,193 |
|
|
|
45,344 |
|
|
|
209,880 |
|
| Exploration Expense |
|
|
216 |
|
|
|
580 |
|
|
|
1,954 |
|
|
|
1,774 |
|
| Depreciation, Depletion,
Amortization and Accretion |
|
|
15,109 |
|
|
|
20,832 |
|
|
|
46,371 |
|
|
|
67,369 |
|
| Other Operating Expense |
|
|
9,899 |
|
|
|
190 |
|
|
|
10,930 |
|
|
|
5,328 |
|
| TOTAL OPERATING
EXPENSES |
|
|
66,246 |
|
|
|
135,337 |
|
|
|
191,556 |
|
|
|
375,717 |
|
| LOSS FROM
OPERATIONS |
|
|
(32,207 |
) |
|
|
(105,681 |
) |
|
|
(100,566 |
) |
|
|
(264,343 |
) |
|
OTHER EXPENSE |
|
|
|
|
|
|
|
|
| Interest Expense |
|
|
(9,646 |
) |
|
|
(11,884 |
) |
|
|
(34,115 |
) |
|
|
(36,077 |
) |
| Gain (Loss) on Derivatives,
Net |
|
|
16,866 |
|
|
|
28,649 |
|
|
|
(8,254 |
) |
|
|
45,487 |
|
| Other Income |
|
|
16 |
|
|
|
25 |
|
|
|
28 |
|
|
|
118 |
|
| Debt Exchange Expense |
|
|
(35 |
) |
|
|
-- |
|
|
|
(9,048 |
) |
|
|
-- |
|
| Gain on Extinguishment of Debt |
|
|
423 |
|
|
|
-- |
|
|
|
24,130 |
|
|
|
-- |
|
| Loss on Equity Method
Investments |
|
|
-- |
|
|
|
-- |
|
|
|
|
-- |
|
|
|
(411 |
) |
| TOTAL OTHER INCOME
(EXPENSE) |
|
|
7,624 |
|
|
|
16,790 |
|
|
|
(27,259 |
) |
|
|
9,117 |
|
|
LOSS FROM CONTINUING OPERATIONS BEFORE INCOME
TAX |
|
|
(24,583 |
) |
|
|
(88,891 |
) |
|
|
(127,825 |
) |
|
|
(255,226 |
) |
| Income Tax Benefit |
|
|
8,106 |
|
|
|
-- |
|
|
|
5,785 |
|
|
|
-- |
|
| NET
LOSS FROM CONTINUING OPERATIONS |
|
|
(16,477 |
) |
|
|
(88,891 |
) |
|
|
(122,040 |
) |
|
|
(255,226 |
) |
| Income
(Loss) From Discontinued Operations, Net of Income Taxes |
|
|
21,892 |
|
|
|
(5,785 |
) |
|
|
12,719 |
|
|
|
(7,770 |
) |
| NET
INCOME (LOSS) |
|
|
5,415 |
|
|
|
(94,676 |
) |
|
|
(109,321 |
) |
|
|
(262,996 |
) |
| Net Income
(Loss) Attributable to Noncontrolling Interests |
|
|
-- |
|
|
|
(1 |
) |
|
|
|
-- |
|
|
|
2,245 |
|
|
NET INCOME (LOSS) ATTRIBUTABLE TO REX ENERGY |
|
|
5,415 |
|
|
|
(94,675 |
) |
|
|
(109,321 |
) |
|
|
(265,241 |
) |
|
Preferred Stock Dividends |
|
|
(613 |
) |
|
|
(2,415 |
) |
|
|
(4,441 |
) |
|
|
(7,245 |
) |
| Effect
of Preferred Stock Conversion |
|
|
-- |
|
|
|
-- |
|
|
|
72,316 |
|
|
|
-- |
|
|
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON
SHAREHOLDERS |
|
$ |
4,802 |
|
|
$ |
(97,090 |
) |
|
$ |
(41,446 |
) |
|
$ |
(272,486 |
) |
| Earnings
per common share: |
|
|
|
|
|
|
|
|
| Basic –
Net Loss From Continuing Operations Attributable to Rex Energy
Common Shareholders |
|
$ |
(0.19 |
) |
|
$ |
(1.69 |
) |
|
$ |
(0.74 |
) |
|
$ |
(4.88 |
) |
| Basic –
Net Income (Loss) From Discontinued Operations Attributable to Rex
Energy Common Shareholders |
|
|
0.24 |
|
|
|
(0.11 |
) |
|
|
0.17 |
|
|
|
(0.19 |
) |
| Basic –
Net Income (Loss) Attributable to Rex Energy Common
Shareholders |
|
$ |
0.05 |
|
|
$ |
(1.80 |
) |
|
$ |
(0.57 |
) |
|
$ |
(5.07 |
) |
| Basic –
Weighted Average Shares of Common Stock Outstanding |
|
|
90,803 |
|
|
|
53,936 |
|
|
|
73,098 |
|
|
|
53,748 |
|
| Diluted
– Net Loss From Continuing Operations Attributable to Rex Energy
Common Shareholders |
|
$ |
(0.19 |
) |
|
$ |
(1.69 |
) |
|
$ |
(0.74 |
) |
|
$ |
(4.88 |
) |
| Diluted
– Net Income (Loss) From Discontinued Operations Attributable to
Rex Energy Common Shareholders |
|
|
0.24 |
|
|
|
(0.11 |
) |
|
|
0.17 |
|
|
|
(0.19 |
) |
| Diluted
– Net Income (Loss) Attributable to Rex Energy Common
Shareholders |
|
$ |
0.05 |
|
|
$ |
(1.80 |
) |
|
$ |
(0.57 |
) |
|
$ |
(5.07 |
) |
| Diluted
– Weighted Average Shares of Common Stock Outstanding |
|
|
90,803 |
|
|
|
53,936 |
|
|
|
73,098 |
|
|
|
53,748 |
|
| |
| REX ENERGY
CORPORATION |
| CONSOLIDATED
OPERATIONAL HIGHLIGHTS |
|
UNAUDITED |
|
|
|
|
|
|
|
|
|
Three Months
Ending |
|
Nine Months
Ending |
|
|
|
September
30, |
|
September
30, |
|
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
| Oil,
Natural Gas, NGL and Ethane sales (in thousands): |
|
|
|
|
|
|
|
|
|
|
|
|
| Natural gas sales |
|
$ |
16,871 |
|
$ |
18,684 |
|
$ |
48,431 |
|
$ |
68,057 |
| Condensate sales |
|
|
4,096 |
|
|
2,837 |
|
|
8,998 |
|
|
12,257 |
| Natural gas liquids (C3+)
sales |
|
|
8,211 |
|
|
5,069 |
|
|
22,053 |
|
|
24,872 |
| Ethane sales |
|
|
4,855 |
|
|
3,058 |
|
|
11,495 |
|
|
6,158 |
| Cash-settled derivatives: |
|
|
|
|
|
|
|
|
|
|
|
|
| Natural gas |
|
|
1,200 |
|
|
8,911 |
|
|
24,280 |
|
|
23,250 |
| Condensate |
|
|
93 |
|
|
2,694 |
|
|
2,191 |
|
|
8,807 |
| Natural gas liquids (C3+) |
|
|
830 |
|
|
3,446 |
|
|
6,040 |
|
|
7,111 |
| Ethane |
|
|
97 |
|
|
-- |
|
|
241 |
|
|
-- |
| Total
oil, gas, NGL and Ethane sales including cash settled
derivatives |
|
$ |
36,253 |
|
$ |
44,699 |
|
$ |
123,729 |
|
$ |
150,512 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production during the period: |
|
|
|
|
|
|
|
|
|
|
|
|
| Natural gas (Mcf) |
|
|
10,927,477 |
|
|
10,731,248 |
|
|
33,559,096 |
|
|
34,160,329 |
| Condensate (Bbls) |
|
|
105,517 |
|
|
85,988 |
|
|
259,145 |
|
|
345,726 |
| Natural gas liquids (C3+)
(Bbls) |
|
|
498,217 |
|
|
498,256 |
|
|
1,495,961 |
|
|
1,571,358 |
| Ethane (Bbls) |
|
|
607,340 |
|
|
423,479 |
|
|
1,578,480 |
|
|
903,086 |
| Total (Mcfe)1 |
|
|
18,193,921 |
|
|
16,777,586 |
|
|
53,560,612 |
|
|
51,081,349 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Production – average per day: |
|
|
|
|
|
|
|
|
|
|
|
|
| Natural gas (Mcf) |
|
|
118,777 |
|
|
116,644 |
|
|
122,478 |
|
|
125,129 |
| Condensate (Bbls) |
|
|
1,147 |
|
|
935 |
|
|
946 |
|
|
1,266 |
| Natural gas liquids (C3+)
(Bbls) |
|
|
5,415 |
|
|
5,416 |
|
|
5,460 |
|
|
5,756 |
| Ethane (Bbls) |
|
|
6,602 |
|
|
4,603 |
|
|
5,761 |
|
|
3,308 |
| Total (Mcfe)1 |
|
|
197,760 |
|
|
182,365 |
|
|
195,477 |
|
|
187,111 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Average
price per unit: |
|
|
|
|
|
|
|
|
|
|
|
|
| Realized natural gas price per Mcf
– as reported |
|
$ |
1.54 |
|
$ |
1.74 |
|
$ |
1.44 |
|
$ |
1.99 |
| Realized impact from cash settled
derivatives per Mcf |
|
|
0.11 |
|
|
0.83 |
|
|
0.73 |
|
|
0.68 |
| Net realized price per Mcf |
|
$ |
1.65 |
|
$ |
2.57 |
|
$ |
2.17 |
|
$ |
2.67 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Realized
condensate price per Bbl – as reported |
|
$ |
38.82 |
|
$ |
32.99 |
|
$ |
34.72 |
|
$ |
35.45 |
| Realized impact from cash settled
derivatives per Bbl2 |
|
|
0.88 |
|
|
31.33 |
|
|
8.46 |
|
|
25.48 |
| Net realized price per Bbl |
|
$ |
39.70 |
|
$ |
64.32 |
|
$ |
43.18 |
|
$ |
60.93 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Realized
natural gas liquids (C3+) price per Bbl – as reported |
|
$ |
16.48 |
|
$ |
10.17 |
|
$ |
14.74 |
|
$ |
15.83 |
| Realized impact from cash settled
derivatives per Bbl |
|
|
1.67 |
|
|
6.82 |
|
|
4.04 |
|
|
4.42 |
| Net realized price per Bbl |
|
$ |
18.15 |
|
$ |
16.99 |
|
$ |
18.78 |
|
$ |
20.25 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Realized
ethane price per Bbl – as reported |
|
$ |
7.99 |
|
$ |
7.22 |
|
$ |
7.28 |
|
$ |
6.82 |
| Realized impact from cash settled
derivatives per Bbl |
|
|
0.16 |
|
|
0.11 |
|
|
0.15 |
|
|
0.19 |
| Net realized price per Bbl |
|
$ |
8.15 |
|
$ |
7.33 |
|
$ |
7.43 |
|
$ |
7.01 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LOE/Mcfe |
|
$ |
1.45 |
|
$ |
1.45 |
|
$ |
1.42 |
|
$ |
1.40 |
| Cash
G&A/Mcfe |
|
$ |
0.23 |
|
$ |
0.28 |
|
$ |
0.25 |
|
$ |
0.31 |
| 1 Oil and natural gas liquids are converted at the rate of one
barrel of oil equivalent to six Mcfe. |
| 2 Includes the effect of derivatives not classified as
discontinued operations. When including the effect of Illinois
Basin production, derivatives realized increased prices by
$0.87/bbl, $10.02/bbl, $3.85/bbl and $9.88/bbl for the three month
periods ended September 30, 2016 and 2015 and the nine month
periods ended September 30, 2016 and 2015, respectively. |
| |
| REX ENERGY
CORPORATION |
| COMMODITY
DERIVATIVES – HEDGE POSITION AS OF 8/1/2016 |
| |
|
|
|
|
2016 |
|
|
2017 |
| Oil Derivatives
(Bbls) |
|
|
|
|
|
|
| Swap Contracts |
|
|
|
|
|
|
| Volume |
|
|
20,000(1) |
|
|
|
21,000 |
|
| Price |
|
$ |
44.00 |
|
|
$ |
51.30 |
|
| Collar Contracts |
|
|
|
|
|
|
| Volume |
|
|
40,000 |
|
|
|
48,000 |
|
| Ceiling |
|
$ |
49.05 |
|
|
$ |
57.20 |
|
| Floor |
|
$ |
37.50 |
|
|
$ |
45.00 |
|
| Collar Contracts with Short
Puts |
|
|
|
|
|
|
| Volume |
|
|
40,000 |
|
|
|
48,000 |
|
| Ceiling |
|
$ |
44.50 |
|
|
$ |
60.75 |
|
| Floor |
|
$ |
35.50 |
|
|
$ |
47.50 |
|
| Short Put |
|
$ |
26.50 |
|
|
$ |
37.50 |
|
| Natural Gas Derivatives
(Mcf) |
|
|
|
|
|
|
| Swap Contracts |
|
|
|
|
|
|
| Volume |
|
|
1,590,000(2) |
|
|
|
11,540,000(3) |
|
| Price |
|
$ |
2.64 |
|
|
$ |
3.00 |
|
| Swaption Contracts |
|
|
|
|
|
|
| Volume |
|
|
100,000 |
|
|
|
-- |
|
| Price |
|
$ |
3.15 |
|
|
$ |
-- |
|
| Put Spread Contracts |
|
|
|
|
|
|
| Volume |
|
|
700,000 |
|
|
|
-- |
|
| Floor |
|
$ |
3.39 |
|
|
$ |
-- |
|
| Short Put |
|
$ |
2.61 |
|
|
$ |
-- |
|
| Collar Contracts with Short
Puts |
|
|
|
|
|
|
| Volume |
|
|
355,000 |
|
|
|
17,510,000 |
|
| Ceiling |
|
$ |
3.50 |
|
|
$ |
3.87 |
|
| Floor |
|
$ |
2.77 |
|
|
$ |
3.01 |
|
| Short Put |
|
$ |
2.18 |
|
|
$ |
2.33 |
|
| Call Contracts |
|
|
|
|
|
|
|
|
| Volume |
|
|
-- |
|
|
|
8,380,100 |
|
| Ceiling |
|
$ |
-- |
|
|
$ |
4.51 |
|
| Collar Contracts |
|
|
|
|
|
|
| Volume |
|
|
560,000 |
|
|
|
1,700,000 |
|
| Ceiling |
|
$ |
2.96 |
|
|
$ |
3.20 |
|
| Floor |
|
$ |
2.56 |
|
|
$ |
2.54 |
|
| Natural Gas Liquids
(Bbls) |
|
|
|
|
|
|
| Swap Contracts |
|
|
|
|
|
|
| Propane
(C3) |
|
|
|
|
|
|
| Volume |
|
|
156,000 |
|
|
|
312,000 |
|
| Price |
|
$ |
21.56 |
|
|
$ |
18.04 |
|
| Butane
(C4) |
|
|
|
|
|
|
| Volume |
|
|
38,000 |
|
|
|
108,000 |
|
| Price |
|
$ |
27.10 |
|
|
$ |
23.80 |
|
| Isobutane
(IC4) |
|
|
|
|
|
|
| Volume |
|
|
16,000 |
|
|
|
48,000 |
|
| Price |
|
$ |
27.93 |
|
|
$ |
24.00 |
|
| Natural Gasoline
(C5+) |
|
|
|
|
|
|
| Volume |
|
|
28,000 |
|
|
|
100,000 |
|
| Price |
|
$ |
50.00 |
|
|
$ |
44.52 |
|
| Ethane |
|
|
|
|
|
|
| Volume |
|
|
110,000 |
|
|
|
540,000 |
|
| Price |
|
$ |
8.49 |
|
|
$ |
10.13 |
|
| Natural Gas Basis
(Mcf) |
|
|
|
|
|
|
| Swap Contracts |
|
|
|
|
|
|
| Dominion
Appalachia |
|
|
|
|
|
|
| Volume |
|
|
1,147,000 |
|
|
|
10,755,000 |
|
| Price |
|
$ |
(0.80 |
) |
|
$ |
(0.79 |
) |
| Texas Gas Zone
1 |
|
|
|
|
|
|
| Volume |
|
|
-- |
|
|
|
14,600,000 |
|
| Price |
|
$ |
-- |
|
|
$ |
(0.13 |
) |
| NYMEX Heating Oil
(Gallon) |
|
|
|
|
|
|
| Swap Contracts |
|
|
|
|
|
|
| Volume |
|
|
2,000 |
|
|
|
-- |
|
| Price |
|
$ |
2.00 |
|
|
$ |
-- |
|
| (1) Includes
20,000 Bbls of enhanced swaps |
| (2) Includes 0.4
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 September 30, |
|
Nine Months
EndedSeptember 30, |
|
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
| Net Loss
From Continuing Operations |
|
$ |
(16,477 |
) |
|
$ |
(88,891 |
) |
|
$ |
(122,040 |
) |
|
$ |
(255,226 |
) |
| Add Back (Less) Non-Recurring Costs
(Income)1 |
|
|
8,306 |
|
|
|
-- |
|
|
|
(6,388 |
) |
|
|
4,774 |
|
| Add Back Depletion, Depreciation,
Amortization and Accretion |
|
|
15,109 |
|
|
|
20,832 |
|
|
|
46,371 |
|
|
|
67,369 |
|
| Add Back (Less) Non-Cash
Compensation Expense (Income) |
|
|
990 |
|
|
|
(222 |
) |
|
|
2,006 |
|
|
|
4,413 |
|
| Add Back Interest Expense |
|
|
9,646 |
|
|
|
11,884 |
|
|
|
34,115 |
|
|
|
36,077 |
|
| Add Back Impairment Expense |
|
|
9,563 |
|
|
|
85,193 |
|
|
|
45,344 |
|
|
|
209,880 |
|
| Add Back Exploration Expenses |
|
|
216 |
|
|
|
580 |
|
|
|
1,954 |
|
|
|
1,774 |
|
| Add Back (Less) (Gain) Loss on
Disposal of Assets |
|
|
10 |
|
|
|
(224 |
) |
|
|
(4,285 |
) |
|
|
(533 |
) |
| Add Back (Less) (Gain) Loss on
Financial Derivatives |
|
|
(16,866 |
) |
|
|
(28,649 |
) |
|
|
8,254 |
|
|
|
(45,487 |
) |
| Add Back Cash Settlement of
Derivatives |
|
|
2,145 |
|
|
|
15,082 |
|
|
|
32,485 |
|
|
|
40,102 |
|
| Less Income Tax Benefit |
|
|
(8,106 |
) |
|
|
-- |
|
|
|
(5,785 |
) |
|
|
-- |
|
| Add Back Non-Cash Portion of Equity
Method Investments |
|
|
-- |
|
|
|
-- |
|
|
|
-- |
|
|
|
406 |
|
| EBITDAX
From Continuing Operations |
|
$ |
4,536 |
|
|
$ |
15,585 |
|
$ |
|
32,031 |
|
$ |
|
63,549 |
|
| Net
Income (Loss) From Discontinued Operations, Net of Income
Taxes |
|
$ |
21,892 |
|
|
$ |
(5,785 |
) |
$ |
|
12,719 |
|
$ |
|
(7,770 |
) |
| Income
Attributable to Noncontrolling Interests |
|
|
-- |
|
|
|
1 |
|
|
|
-- |
|
|
|
(2,245 |
) |
| Income
(Loss) From Discontinued Operations Attributable to Rex Energy |
|
|
21,892 |
|
|
|
(5,784 |
) |
|
|
12,719 |
|
|
|
(10,015 |
) |
| Add Back Depletion, Depreciation,
Amortization and Accretion |
|
|
18 |
|
|
|
6,294 |
|
|
|
5,100 |
|
|
|
15,497 |
|
| Add Back (Less) Non-Cash
Compensation Expense (Income) |
|
|
(366 |
) |
|
|
140 |
|
|
|
(107 |
) |
|
|
421 |
|
| Add Back Interest Expense |
|
|
1 |
|
|
|
59 |
|
|
|
4 |
|
|
|
507 |
|
| Add Back Impairment Expense |
|
|
-- |
|
|
|
54,619 |
|
|
|
3,543 |
|
|
|
54,797 |
|
| Add Back Exploration Expense |
|
|
-- |
|
|
|
227 |
|
|
|
143 |
|
|
|
468 |
|
| Less Gain on Disposal of
Assets |
|
|
(30,491 |
) |
|
|
(57,024 |
) |
|
|
(30,535 |
) |
|
|
(56,988 |
) |
| Less Non-Cash Portion of
Noncontrolling Interests |
|
|
-- |
|
|
|
(23 |
) |
|
|
-- |
|
|
|
(209 |
) |
| Add Back Income Tax Expense |
|
|
8,354 |
|
|
|
2,416 |
|
|
|
7,852 |
|
|
|
2,658 |
|
| Add EBITDAX From Discontinued
Operations |
|
$ |
(592 |
) |
|
$ |
924 |
|
|
$ |
(1,281 |
) |
|
$ |
7,136 |
|
| EBITDAX
(Non-GAAP) |
|
$ |
3,944 |
|
|
$ |
16,509 |
|
|
$ |
30,750 |
|
|
$ |
70,685 |
|
| |
| 1 For the three and nine months ended September
30, 2016, includes approximately $8.3 million in expense related to
a firm transportation agreement. During the third quarter of 2016,
the company made a decision to cease all future development
activities in the area associated with this firm transportation
contract. For the three months ended September 30, 2016, includes
$0.4 million in gains on the extinguishment of debt. For the nine
months ended September 30, 2016, includes approximately $24.1
million in gains on the extinguishment of debt and $9.0 million in
debt exchange expenses. For the three and nine months ended
September 30, 2015, includes net fees incurred to terminate two
drilling rig contracts earlier than their original term. |
| |
Adjusted Net Income
“Adjusted Net Income” means, for any period, the sum of net
income (loss) from continuing operations before income taxes for
the period plus the following expenses, charges or income, in each
case, to the extent deducted from or added to net income in the
period: unrealized losses from financial derivatives, non-cash
compensation expense, dry hole expenses, disposals of assets,
impairment and other one-time or non-recurring charges, minus all
gains from unrealized financial derivatives, disposal of assets and
deferred income tax benefits, added to net income. Adjusted Net
Income is used as a financial measure by Rex Energy's management
team and by other users of its financial statements, to analyze its
financial performance without regard to non-cash deferred taxes and
non-cash unrealized losses or gains from oil and gas derivatives.
Adjusted Net Income is not a calculation based on GAAP financial
measures and should not be considered as an alternative to net
income (loss) in measuring the company's performance.
Rex Energy reports Adjusted Net Income because it believes that
this measure is commonly reported and widely used by investors as
an indicator of a company's operating performance. You should
carefully consider the specific items included in the company's
computation of this measure. You are cautioned that Adjusted Net
Income as reported by Rex Energy may not be comparable in all
instances to that reported by other companies.
To compensate for these limitations, the company believes it is
important to consider both net income determined under GAAP and
Adjusted Net Income.
The following table presents a reconciliation of Rex Energy’s
net income from continuing operations to its adjusted net income
for each of the periods presented ($ in thousands):
| |
|
For the Three
Months Ended |
|
For the Nine
Months Ended |
| |
|
September
30, |
|
September 30, |
| |
|
|
2016 |
|
2015 |
|
|
2016 |
|
2015 |
| Loss From Continuing Operations
Before Income Taxes, as reported |
|
$ |
(24,583 |
) |
$ |
(88,891 |
) |
|
$ |
(127,825 |
) |
$ |
(255,226 |
) |
| Gain (Loss) on Derivatives,
Net |
|
|
(16,866 |
) |
|
(28,649 |
) |
|
|
8,254 |
|
|
(45,487 |
) |
| Cash Settlement of Derivatives |
|
|
2,145 |
|
|
15,082 |
|
|
|
32,485 |
|
|
40,102 |
|
| Add Back (Less) Losses (Gains) from
Financial Derivatives |
|
|
(14,721 |
) |
|
(13,564 |
) |
|
|
40,739 |
|
|
(5,385 |
) |
| Add Back Non-Recurring Costs1 |
|
|
8,306 |
|
|
-- |
|
|
|
(6,388 |
) |
|
4,774 |
|
| Add Back Impairment Expense |
|
|
9,563 |
|
|
85,193 |
|
|
|
45,344 |
|
|
209,880 |
|
| Add Back Dry Hole Expense |
|
|
2 |
|
|
-- |
|
|
|
848 |
|
|
191 |
|
| Add Back (Less) Non-Cash
Compensation Expense (Income) |
|
|
990 |
|
|
(222 |
) |
|
|
2,006 |
|
|
4,413 |
|
| Add Back (Less) (Gain) Loss on
Disposal of Assets |
|
|
10 |
|
|
(224 |
) |
|
|
(4,285 |
) |
|
(533 |
) |
| Loss From Continuing Operations
Before Income Taxes, adjusted |
|
$ |
(20,433 |
) |
$ |
(17,708 |
) |
|
$ |
(49,561 |
) |
$ |
(41,886 |
) |
| Less Income Tax Benefit,
adjusted2 |
|
|
8,173 |
|
|
7,083 |
|
|
|
19,824 |
|
|
16,754 |
|
| Adjusted Net Loss From Continuing
Operations |
|
$ |
(12,260 |
) |
$ |
(10,625 |
) |
|
$ |
(29,737 |
) |
$ |
(25,132 |
) |
| |
|
|
|
|
|
|
|
|
|
|
| Basic – Adjusted Net Loss Per
Share |
|
$ |
(0.14 |
) |
$ |
(0.20 |
) |
|
$ |
(0.41 |
) |
$ |
(0.47 |
) |
| Basic – Weighted Average Shares of
Common Stock Outstanding |
|
|
90,803 |
|
|
53,936 |
|
|
|
73,098 |
|
|
53,748 |
|
| |
| 1 For the three and nine months ended September 30, 2016,
includes approximately $8.3 million in expense related to a firm
transportation agreement. During the third quarter of 2016, the
company made a decision to cease all future development activities
in the area associated with this firm transportation contract. For
the three months ended September 30, 2016, includes $0.4 million in
gains on the extinguishment of debt. For the nine months ended
September 30, 2016, includes approximately $24.1 million in gains
on the extinguishment of debt and $9.0 million in debt exchange
expenses. For the three and nine months ended September 30, 2015,
includes net fees incurred to terminate two drilling rig contracts
earlier than their original term. |
| 2Assumes 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 September 30, |
|
Nine Months
Ended September 30, |
| |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
| GAAP
G&A |
|
$ |
5,116 |
|
$ |
4,507 |
|
|
$ |
15,237 |
|
$ |
20,253 |
| Non-Cash
Compensation Expense |
|
|
990 |
|
|
(222 |
) |
|
|
2,006 |
|
|
4,413 |
| Cash
G&A |
|
$ |
4,126 |
|
$ |
4,729 |
|
|
$ |
13,231 |
|
$ |
15,840 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
For more information contact:
Investor Relations
(814) 278-7130
InvestorRelations@rexenergycorp.com