Bonanza Creek Energy, Inc. (NYSE:BCEI) (“Bonanza Creek” or the
“Company”) today announces that, in connection with leadership
changes at the Company, Mr. Richard J. Carty has resigned as
President and Chief Executive Officer and as a member of the Board
of Directors and Mr. R. Seth Bullock has been appointed as Interim
Chief Executive Officer. The Company also today announces that the
Board of Directors has approved the Company’s 2017 capital program.
Bullock Appointed as Interim Chief Executive Officer
Upon Resignation of Carty
Mr. Richard J. Carty has resigned as President and Chief
Executive Officer of the Company and as a member of the Board of
Directors. Effective immediately, the Board of Directors has
retained Mr. R. Seth Bullock, a managing director of Alvarez &
Marshal, LLC (“A&M”), as Interim Chief Executive Officer.
Seth Bullock, age 43, is a Managing Director with A&M and
has been with the firm since 2014. Mr. Bullock brings over 20
years of experience in the energy industry. Prior to joining
A&M, Mr. Bullock worked with several restructuring and
investment advisory firms. Mr. Bullock earned a bachelor’s
degree in Finance from Loyola University, New Orleans.
Additionally, Mr. Bullock led A&M’s recent efforts in assisting
the Company through its restructuring.
“On behalf of the Board of Directors, we are pleased to announce
that we have retained Seth Bullock as Interim Chief Executive
Officer to assist in the management transition and quickly deliver
on our resumed drilling initiatives while working to strengthen our
Company, drive cash flow and create value for our shareholders,
employees and community. Seth brings exceptional expertise in areas
of near-term focus for the Company, and we are excited to welcome
him back at Bonanza Creek,” said Mr. Jack E. Vaughn, Chairman of
Bonanza Creek. “On behalf of the Board of Directors, I would also
like to wish Rich the best in his future endeavors. With the
capital plan approved and transitional leadership in place, the
Board will now focus on securing long-term leadership for the
Company.”
2017 Capital Program and Production
Guidance
The Board of Directors has approved the Company’s 2017 capital
program of approximately $130 million. Mr. Vaughn commented,
“We are very pleased to recommence development activities with a
1-rig drilling and completion program that focuses on sustainable
value creation for stockholders. With the benefit of a
debt-free balance sheet, liquidity of approximately $250 million,
and improvements in well performance, the Company is in an
advantaged position to focus on profitable growth and productivity
initiatives that drive competitive long-term field development
returns in our core Wattenberg asset. Additionally, over $200
million of new equity was invested last month by our shareholders,
signaling their confidence in our business.”
Bonanza Creek plans to commence its drilling and completion
program around July 1, 2017. The plan will utilize one drilling rig
in its Rockies program to drill approximately 24 wells, nine of
which will be XRLs. In addition to the drilling program, the
Company is in the process of completing its six drilled but
uncompleted wells and expects to complete 18 of its new wells,
totaling 24 completions for the year, five of which will be XRLs.
From a geographical standpoint, Bonanza Creek’s operated
development program for 2017 will focus primarily on its western
legacy acreage and strategic appraisal of its southern (“French
Lake”) acreage. The Company will also participate in non-operated
wells in the Wattenberg, and invest in Mid-Continent recompletions.
To support current and future development, Bonanza Creek has
allocated approximately $25 million toward infrastructure and other
items, which will include new gathering facilities in our Rocky
Mountain Infrastructure, LLC (“RMI”) system, pumping unit
installations, power and telemetry infrastructure, and key
leasehold expansion. These investments will provide long-term value
by minimizing surface infrastructure bottlenecks, reducing
operating costs, and enhancing the Company’s leasehold position.
The table below details the Company’s capital allocation and
production guidance for 2017.
|
|
2017 Capital
Program |
|
|
|
Drilling and
Completion |
|
Rockies |
$ |
80 |
Mid-Continent |
|
3 |
Non-Operated |
|
23 |
Total Drilling
and Completion |
$ |
106 |
Infrastructure/Other |
|
24 |
Total
Capital |
$ |
130 |
2017 Production
Guidance |
|
|
|
|
Three Months Ended June 30, 2017 |
|
Twelve Months Ended December 31, 2017 |
|
|
|
|
Production
(MBoe/d) |
15.8 –
16.2 |
|
16.0 –
17.0 |
|
|
|
|
The Company expects its first drilled uncompleted wells to
commence production in the third quarter and the remainder of its
completion program to commence production in the fourth quarter.
The Company expects its 2017 Rocky Mountain oil differentials to be
$4.25 off of WTI pricing, per the terms of its previously announced
renegotiated oil transportation agreement.
For the remainder of 2017, the Company will focus its efforts on
initiatives aimed at maximizing project level economics and
retaining and delineating the opportunity set in French Lake.
Due to the late commencement of the 2017 capital program,
production contribution from this year’s drilling and completions
will predominantly occur in 2018.
With regard to maximizing project economics, the Company will
focus its entire 2017 program on enhancing well productivity by
testing higher completion intensity and enhanced recovery flow back
(ERF). The Company will test designs of up to 2,000 pounds of sand
per lateral foot, stage spacing down to 100 feet, and other
completions innovations. In addition to these operated tests,
the Company’s program contemplates participation in approximately
25 non-operated wells that will also test various enhanced
completion designs. The information received from both the operated
and non-operated programs in 2017 will be critical to understanding
how to best develop our Wattenberg acreage in 2018 and beyond by
maximizing NPV per section in various commodity price
environments.
In an effort to retain and delineate its French Lake acreage,
Bonanza Creek plans to drill eight and complete two XRLs in the
French Lake area in 2017. Data received from these appraisal wells
will be key to identifying the potential of this largely
undeveloped portion of the Company’s acreage. In addition, these
appraisal wells will both hold the French Lake acreage by
production and will effectively eliminate expiry risk within the
Company’s Wattenberg acreage position.
As field activity commences and new production comes online, the
Company plans to re-initiate its commodity price hedging program to
lock in a portion of its cash flows and protect project
returns.
About Bonanza Creek Energy, Inc.
Bonanza Creek Energy, Inc. is an independent oil and natural gas
company engaged in the acquisition, exploration, development and
production of onshore oil and associated liquids-rich natural gas
in the United States. The Company’s assets and operations are
concentrated primarily in the Rocky Mountain region in the
Wattenberg Field, focused on the Niobrara and Codell formations,
and in southern Arkansas, focused on oily Cotton Valley sands. The
Company’s common shares are listed for trading on the NYSE under
the symbol: “BCEI.” For more information about the Company, please
visit www.bonanzacrk.com. Please note that the Company routinely
posts important information about the Company under the Investor
Relations section of its website.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. All statements,
other than statements of historical facts, included in this press
release that address activities, events or developments that the
Company expects, believes or anticipates will or may occur in the
future are forward-looking statements. These statements are based
on certain assumptions made by the Company based on management’s
experience, perception of historical trends and technical analyses,
current conditions, anticipated future developments and other
factors believed to be appropriate and reasonable by management.
When used in this press release, the words “will,” “potential,”
“believe,” “estimate,” “intend,” “expect,” “may,” “should,”
“anticipate,” “could,” “plan,” “predict,” “project,” “profile,”
“model” or their negatives, other similar expressions or the
statements that include those words, are intended to identify
forward-looking statements, although not all forward-looking
statements contain such identifying words. These statements include
statements regarding development and completion expectations and
strategy; decreasing operating and capital costs; impact of the
Company's reorganization; and updated 2017 guidance. Such
statements are subject to a number of assumptions, risks and
uncertainties, many of which are beyond the control of the Company,
that may cause actual results to differ materially from those
implied or expressed by the forward-looking statements, including
the following: changes in natural gas, oil and NGL prices; general
economic conditions, including the performance of financial markets
and interest rates; drilling results; shortages of oilfield
equipment, services and personnel; operating risks such as
unexpected drilling conditions; ability to acquire adequate
supplies of water; risks related to derivative instruments; access
to adequate gathering systems and pipeline take-away capacity; and
pipeline and refining capacity constraints. Further information on
such assumptions, risks and uncertainties is available in the
Company’s SEC filings. We refer you to the discussion of risk
factors in our Annual Report on Form 10-K for the year ended
December 31, 2016, filed on March 16, 2017, and other filings
submitted by us to the Securities Exchange Commission. The
Company’s SEC filings are available on the Company’s website at
www.bonanzacrk.com and on the SEC’s website at www.sec.gov.
All of the forward-looking statements made in this press release
are qualified by these cautionary statements. Any forward-looking
statement speaks only as of the date on which such statement is
made, including guidance, and the Company undertakes no obligation
to correct or update any forward-looking statement, whether as a
result of new information, future events or otherwise, except as
required by applicable law.
For further information, please contact:
James R. Edwards
Director - Investor Relations
720-440-6136
jedwards@bonanzacrk.com
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