HOUSTON, May 10, 2018 /PRNewswire/ -- Gastar
Exploration Inc. (NYSE American: GST) ("Gastar" or the "Company")
today reported financial and operating results for the three months
ended March 31, 2018.
First quarter 2018 highlights
- Became a pure Oklahoma STACK Play operator with the sale of the
West Edmund Hunton Lime Unit ("WEHLU") assets, which closed
February 28, 2018.
- STACK Play average daily production, excluding WEHLU, was 5,500
barrels of oil equivalent ("Boe") per day ("Boe/d"), a 38% increase
over fourth quarter 2017 STACK Play production and a 125% increase
over first quarter 2017 STACK Play production.
- Total average daily production increased 7% over fourth quarter
2017 total production and 30% over first quarter 2017 total
production.
Michael Gerlich, Gastar's Senior
Vice President and Chief Financial Officer, commented, "We achieved
strong production growth during the quarter from our STACK Play
acreage reflecting the efficient and effective pace of our drilling
and completion program, as well as improved production performance
from our new completion design with increased frack
stages. First quarter production volumes were boosted by
higher working interests in operated wells under forced pooling,
resulting in volumes exceeding our guidance. Our growing
production volumes coupled with improved oil pricing generated
higher revenues."
Financial Review
Net loss attributable to Gastar's common stockholders for the
first quarter of 2018 was $19.1 million, or a loss of $0.09 per share, compared to a first quarter 2017
net loss of $22.3 million, or a
loss of $0.14 per share.
Adjusted net loss attributable to common stockholders (non-GAAP),
which excludes non-cash and unusual items, was $12.3 million, or a loss of $0.06 per share, for the first quarter of 2018,
compared to $9.6 million, or a loss
of $0.06 per share, for the first
quarter 2017 and $6.6 million, or
$0.03 per share, for the fourth
quarter of 2017. (See the accompanying reconciliation of the
non-GAAP financial measure adjusted net loss at the end of this
news release.)
Adjusted earnings before interest, income taxes, depreciation,
depletion and amortization ("adjusted EBITDA") (non-GAAP) for the
first quarter of 2018 increased 14% to $12.0
million compared to $10.6 million for the first quarter of 2017
and decreased 22% sequentially from $15.5
million for the fourth quarter of 2017. The sequential
decline in adjusted EBITDA was due to the sale of WEHLU during the
first quarter of 2018, loss on realized hedges and higher operating
costs. (See the accompanying reconciliation of the non-GAAP
financial adjusted EBITDA at the end of this news release.)
Revenues from oil, condensate, natural gas and natural gas
liquids ("NGLs"), before the effects of commodity derivatives
contracts, totaled $26.4 million in
the first quarter of 2018, a 52% increase from $17.4 million in the first quarter of 2017 and an
11% increase from $23.7 million in
the fourth quarter of 2017. The increase from the first
quarter of 2017 in oil, condensate, natural gas and NGLs revenues
primarily resulted from a 17% increase in equivalent product
pricing and a 30% increase in equivalent production volumes.
The increase from fourth quarter 2017 revenues was due to a 7%
increase in equivalent product pricing and a 7% increase in daily
equivalent production volumes. First quarter 2018 oil,
condensate and NGLs revenues were net of transportation, treating
and gathering costs of $933,000
pursuant to current authoritative accounting guidance.
Commodity derivatives were in place for approximately 79% of our
oil and condensate production, 69% of our natural gas production
and 33% of our NGLs production for the first quarter of 2018.
Commodity derivative contracts settled during the first quarter of
2018 resulted in a $2.2 million
decrease in revenue compared to a $1.9
million increase in revenues in the first quarter of
2017. For details on Gastar's current hedging position,
please see our Quarterly Report on Form 10-Q for the quarter ended
March 31, 2018 filed today with the
United States Securities and Exchange Commission (the "SEC").
The following table provides a summary of Gastar's total net
production volumes and overall average commodity prices for the
three months ended March 31, 2018 and
2017:
|
|
For the Three
Months Ended
March
31,
|
|
|
|
|
2018
|
|
|
2017
|
|
|
|
|
|
|
|
Net
Production:
|
|
|
|
|
|
|
|
|
|
Oil and condensate
(MBbl)
|
|
|
343
|
|
|
|
250
|
|
|
Natural gas
(MMcf)
|
|
|
1,063
|
|
|
|
863
|
|
|
NGLs (MBbl)
|
|
|
144
|
|
|
|
117
|
|
|
Total net production
(MBoe)
|
|
|
664
|
|
|
|
511
|
|
|
Net Daily
production:
|
|
|
|
|
|
|
|
|
|
Oil and condensate
(MBbl/d)
|
|
|
3.8
|
|
|
|
2.8
|
|
|
Natural gas
(MMcf/d)
|
|
|
11.8
|
|
|
|
9.6
|
|
|
NGLs
(MBbl/d)
|
|
|
1.6
|
|
|
|
1.3
|
|
|
Total net daily
production (MBoe/d)
|
|
|
7.4
|
|
|
|
5.7
|
|
|
Average sales price
per unit(1):
|
|
|
|
|
|
|
|
|
|
Oil and condensate per
Bbl, including impact of hedging activities
(2)
|
|
$
|
55.23
|
|
|
$
|
54.53
|
|
|
Oil and condensate per
Bbl, excluding impact of hedging activities
|
|
$
|
61.22
|
|
|
$
|
48.78
|
|
|
Natural gas per Mcf,
including impact of hedging activities (2)
|
|
$
|
2.25
|
|
|
$
|
3.22
|
|
|
Natural gas per Mcf,
excluding impact of hedging activities
|
|
$
|
2.05
|
|
|
$
|
3.00
|
|
|
NGLs per Bbl,
including impact of hedging activities (2)
|
|
$
|
20.28
|
|
|
$
|
24.28
|
|
|
NGLs per Bbl,
excluding impact of hedging activities
|
|
$
|
22.80
|
|
|
$
|
22.11
|
|
|
Average sales price
per Boe, including impact of hedging
activities(1)(2)
|
|
$
|
36.53
|
|
|
$
|
37.68
|
|
|
Average sales price
per Boe, excluding impact of hedging
activities(1)
|
|
$
|
39.85
|
|
|
$
|
34.00
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease operating
expense per Boe
|
|
$
|
11.32
|
|
|
$
|
9.92
|
|
|
|
|
|
|
|
|
|
|
|
|
_____________________________
|
(1)
|
Average sales price
per unit for 2018 are net of transportation, treating and gathering
costs, which were previously reported separately as
expenses.
|
(2)
|
The impact of hedging
includes only the gain (loss) on commodity derivative contracts
settled during the periods presented.
|
The following table provides a summary of Gastar's Mid-Continent
STACK Play production volumes and average commodity prices,
excluding WEHLU which was sold in February
2018, for the three months ended March 31, 2018 and 2017:
|
|
For the Three
Months Ended
March
31,
|
|
|
|
|
2018
|
|
|
2017
|
|
|
STACK Play
(excludes WEHLU)
|
|
|
|
|
|
|
|
|
|
Net
Production:
|
|
|
|
|
|
|
|
|
|
Oil and condensate
(MBbl)
|
|
|
261
|
|
|
|
100
|
|
|
Natural gas
(MMcf)
|
|
|
820
|
|
|
|
434
|
|
|
NGLs (MBbl)
|
|
|
96
|
|
|
|
47
|
|
|
Total net production
(MBoe)
|
|
|
494
|
|
|
|
219
|
|
|
Net Daily
Production:
|
|
|
|
|
|
|
|
|
|
Oil and condensate
(MBbl/d)
|
|
|
2.9
|
|
|
|
1.1
|
|
|
Natural gas
(MMcf/d)
|
|
|
9.1
|
|
|
|
4.8
|
|
|
NGLs
(MBbl/d)
|
|
|
1.1
|
|
|
|
0.5
|
|
|
Total net daily
production (MBoe/d)
|
|
|
5.5
|
|
|
|
2.4
|
|
|
Average sales price
per unit(1):
|
|
|
|
|
|
|
|
|
|
Oil and condensate
(per Bbl)
|
|
$
|
61.23
|
|
|
$
|
48.75
|
|
|
Natural gas (per
Mcf)
|
|
$
|
1.87
|
|
|
$
|
3.02
|
|
|
NGLs (per
Bbl)
|
|
$
|
22.55
|
|
|
$
|
23.54
|
|
|
Average sales price
per Boe(1)
|
|
$
|
39.90
|
|
|
$
|
33.22
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease operating
expense per Boe
|
|
$
|
10.79
|
|
|
$
|
9.83
|
|
|
_____________________________
|
(1)
|
Excludes the impact
of hedging activities. Average sales price per unit for 2018
are net of transportation, treating and gathering costs, which were
previously reported separately as expenses
|
First quarter 2018 STACK Play, excluding WEHLU, equivalent
production was 5.5 MBoe/d as compared to first quarter 2017 and
fourth quarter 2017 production of 2.4 and 4.0 MBoe/d,
respectively. STACK Play production for the first quarter of
2018 consisted of approximately 72% liquids, comprised of 53% oil
and 19% NGLs, in line with fourth quarter 2017 production and up
from 67% liquids in the first quarter of 2017.
Total lease operating expenses ("LOE") per Boe of production as
reported were $11.32 in the first
quarter of 2018 versus $9.93 per Boe
in the first quarter of 2017 and $9.14 per Boe in the fourth quarter of 2017,
including workover costs per Boe of $1.21, $2.19 and
$0.50, respectively. STACK Play
LOE per Boe including workover costs for the first quarter of 2018
was $10.79 compared to $9.83 and $9.96 per
Boe in the first and fourth quarters, respectively, of 2017.
The increase in LOE per Boe was primarily due to higher water
production and associated disposal costs related to new producing
wells.
General and administrative ("G&A") expense was $9.0 million in the first quarter of 2018
compared to $3.8 million in the first
quarter of 2017 and $4.4 million in
the fourth quarter of 2017. The increase in G&A expense was
primarily due to one-time severance costs. G&A expense
for the first quarter of 2018 included $1.7
million of non-cash stock-based compensation expense, versus
$996,000 in the first quarter of 2017
and $1.9 million in the fourth
quarter of 2017. Excluding non-cash stock based compensation
and one-time severance costs, cash G&A expense per Boe for the
first quarters of 2018 and 2017 and the fourth quarter 2017 were
$5.57, $5.54 and $3.83,
respectively, while on a STACK only production basis, first quarter
2018 cash G&A expense was $7.49
per Boe.
Capital Budget
Gastar's capital expenditures in the first quarter of 2018
totaled $35.0 million, comprised of
$27.6 million for drilling,
completions and infrastructure costs, $4.5
million for unproved acreage extensions, renewals and
additions and $2.9 million for other
capitalized costs.
As previously announced, on February 28,
2018, the Company completed the sale of its interest in
WEHLU for $107.5 million, adjusted
for the effective date of October 1,
2017 and resulting in net cash proceeds of $97.6 million after effective date adjustments,
fees and expenses.
Operations Review and Update
Stephen Roberts, Senior Vice
President and Chief Operating Officer, commented, "We are pleased
with the excellent progress we are making in 2018 to develop and
delineate our STACK Play acreage effectively. Our execution
of the improved drilling and completion procedures we implemented
last year continues to result in lower average well costs.
Recently, we further enhanced our well performance utilizing our
new Gen. 3.0 completion design by increasing the number of
hydraulic fracture stages per well."
"During the first quarter, we focused on drilling wells
targeting the Osage formation and
are currently using 35-stage completions versus our earlier wells
with 25-stage completions. We are encouraged by our early
production results as well as the results of similarly drilled and
completed wells by offset operators. "
Currently, Gastar is running one rig in its STACK Play
acreage. During the first quarter of 2018, the Company spud
four gross (3.7 net) operated Osage wells, completed three gross (2.7 net)
Osage operated wells and
participated in numerous third-party wells across its 67,900 net
acre core STACK Play acreage position. This highly contiguous
position is approximately 84% operated and 68% held by
production.
During the second quarter of 2018, the Company expects to spud
between three and four gross Osage
operated wells and two gross Meramec operated wells on its
acreage.
Guidance for Second Quarter 2018 and Full-Year 2018
Our guidance for the second quarter and full-year 2018,
excluding WEHLU results, is presented 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
|
|
Second
Quarter
2018
|
|
Full-Year
2018
|
|
|
|
|
|
|
|
Net average daily
(MBoe/d)(1)
|
|
5.0 – 5.6
|
|
5.3 – 6.1
|
|
Liquids
percentage
|
|
70% – 74%
|
|
70% – 74%
|
|
|
|
|
|
|
|
Cash Operating
Expenses
|
|
|
|
|
|
Production taxes (%
of production revenues)
|
|
3.8% –
4.4%
|
|
4.8% –
5.4%
|
|
Direct lease
operating ($/Boe)
|
|
$8.60 –
$9.30
|
|
$8.70 –
$9.30
|
|
Cash general &
administrative ($/Boe)
|
|
$6.50 –
$7.10
|
|
$5.90 –
$6.60
|
|
________________
|
(1)
|
Based on equivalent
of 6 thousand cubic feet (Mcf) of natural gas to one barrel of oil,
condensate or NGLs.
|
Conference Call
Gastar has scheduled a conference call for 10:00 a.m.
Eastern Time (9:00 a.m. Central
Time) on Friday, May 11,
2018. 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 May 25th by dialing 1-201-612-7415 and using the
conference ID: 13678944.
|
|
|
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
in the United States. 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 the normally pressured oil window of the STACK Play, an
area of central Oklahoma which is
home to multiple oil and natural gas-rich reservoirs including the
Oswego limestone, Meramec and Osage bench formations within the Mississippi
Lime, the Woodford shale and
Hunton limestone formations. For more information, visit Gastar's
website at www.gastar.com.
Forward Looking Statements
This news release includes "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. 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 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; 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 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. In addition,
production information from our recently completed wells completed
using our Gen 3 design is preliminary based on limited flow back
history and therefore may not be fully indicative of sustained
production rates or predictive of ultimate hydrocarbon
recoveries. 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 second quarter and
full-year of 2018 are based upon the current 2018 planned capital
expenditures budget, which may be subject to revision and
reevaluation dependent upon future developments, including changes
in commodity prices, drilling results, our liquidity position,
availability of crews, supplies and production capacity, weather
delays and significant changes in drilling costs.
Unless otherwise stated herein, equivalent volumes of production
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.
- Financial Tables Follow –
GASTAR EXPLORATION
INC.
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|
|
|
For the Three
Months Ended
March
31,
|
|
|
|
2018
|
|
|
2017
|
|
|
|
(in thousands,
except share and per share data)
|
|
REVENUES:
|
|
|
|
|
|
|
|
|
Oil and
condensate
|
|
$
|
20,982
|
|
|
$
|
12,190
|
|
Natural gas
|
|
|
2,181
|
|
|
|
2,588
|
|
NGLs
|
|
|
3,275
|
|
|
|
2,591
|
|
Total oil and
condensate, natural gas and NGLs revenues
|
|
|
26,438
|
|
|
|
17,369
|
|
(Loss) gain on
commodity derivatives contracts
|
|
|
(5,529)
|
|
|
|
1,300
|
|
Total
revenues
|
|
|
20,909
|
|
|
|
18,669
|
|
EXPENSES:
|
|
|
|
|
|
|
|
|
Production
taxes
|
|
|
989
|
|
|
|
485
|
|
Lease operating
expenses
|
|
|
7,509
|
|
|
|
5,072
|
|
Transportation,
treating and gathering
|
|
|
—
|
|
|
|
311
|
|
Depreciation,
depletion and amortization
|
|
|
8,978
|
|
|
|
4,652
|
|
Accretion of asset
retirement obligation
|
|
|
56
|
|
|
|
51
|
|
General and
administrative expense
|
|
|
8,968
|
|
|
|
3,824
|
|
Total
expenses
|
|
|
26,500
|
|
|
|
14,395
|
|
(LOSS) INCOME FROM
OPERATIONS
|
|
|
(5,591)
|
|
|
|
4,274
|
|
OTHER (EXPENSE)
INCOME:
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
(9,937)
|
|
|
|
(10,849)
|
|
Loss on early
extinguishment of debt
|
|
|
—
|
|
|
|
(12,172)
|
|
Investment income and
other
|
|
|
17
|
|
|
|
49
|
|
LOSS BEFORE PROVISION
FOR INCOME TAXES
|
|
|
(15,511)
|
|
|
|
(18,698)
|
|
Provision for income
taxes
|
|
|
—
|
|
|
|
—
|
|
NET LOSS
|
|
|
(15,511)
|
|
|
|
(18,698)
|
|
Dividends on preferred
stock
|
|
|
—
|
|
|
|
(3,618)
|
|
Undeclared cumulative
dividends on preferred stock
|
|
|
(3,618)
|
|
|
|
—
|
|
NET LOSS ATTRIBUTABLE
TO COMMON STOCKHOLDERS
|
|
$
|
(19,129)
|
|
|
$
|
(22,316)
|
|
NET LOSS PER SHARE OF
COMMON STOCK ATTRIBUTABLE TO
COMMON STOCKHOLDERS:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.09)
|
|
|
$
|
(0.14)
|
|
Diluted
|
|
$
|
(0.09)
|
|
|
$
|
(0.14)
|
|
WEIGHTED AVERAGE
SHARES OF COMMON STOCK
OUTSTANDING:
|
|
|
|
|
|
|
|
|
Basic
|
|
|
209,903,482
|
|
|
|
162,829,221
|
|
Diluted
|
|
|
209,903,482
|
|
|
|
162,829,221
|
|
GASTAR EXPLORATION
INC.
CONSOLIDATED
BALANCE SHEETS
|
|
|
|
March
31,
|
|
|
December
31,
|
|
|
|
2018
|
|
|
2017
|
|
|
|
(in thousands, except share and
per share data)
|
|
ASSETS
|
|
|
|
|
|
|
|
|
CURRENT
ASSETS:
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
100,215
|
|
|
$
|
13,266
|
|
Accounts receivable,
net of allowance for doubtful accounts of $1,953
|
|
|
22,148
|
|
|
|
38,575
|
|
Commodity derivative
contracts
|
|
|
542
|
|
|
|
1,370
|
|
Prepaid
expenses
|
|
|
928
|
|
|
|
960
|
|
Total current
assets
|
|
|
123,833
|
|
|
|
54,171
|
|
PROPERTY, PLANT AND
EQUIPMENT:
|
|
|
|
|
|
|
|
|
Oil and natural gas
properties, full cost method of accounting:
|
|
|
|
|
|
|
|
|
Unproved properties,
excluded from amortization
|
|
|
136,178
|
|
|
|
131,955
|
|
Proved
properties
|
|
|
1,276,638
|
|
|
|
1,344,329
|
|
Total natural gas and
oil properties
|
|
|
1,412,816
|
|
|
|
1,476,284
|
|
Furniture and
equipment
|
|
|
3,849
|
|
|
|
3,838
|
|
Total property, plant
and equipment
|
|
|
1,416,665
|
|
|
|
1,480,122
|
|
Accumulated
depreciation, depletion and amortization
|
|
|
(1,164,005)
|
|
|
|
(1,155,027)
|
|
Total property, plant
and equipment, net
|
|
|
252,660
|
|
|
|
325,095
|
|
OTHER
ASSETS:
|
|
|
|
|
|
|
|
|
Restricted
cash
|
|
|
370
|
|
|
|
370
|
|
Advances to
operators
|
|
|
81
|
|
|
|
82
|
|
Other
|
|
|
150
|
|
|
|
405
|
|
Total other
assets
|
|
|
601
|
|
|
|
857
|
|
TOTAL
ASSETS
|
|
$
|
377,094
|
|
|
$
|
380,123
|
|
LIABILITIES AND
STOCKHOLDERS' DEFICIT
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
8,537
|
|
|
$
|
24,382
|
|
Revenue
payable
|
|
|
17,676
|
|
|
|
11,823
|
|
Accrued
interest
|
|
|
7,317
|
|
|
|
7,298
|
|
Accrued drilling and
operating costs
|
|
|
15,885
|
|
|
|
9,381
|
|
Advances from
non-operators
|
|
|
1,502
|
|
|
|
1,445
|
|
Commodity derivative
contracts
|
|
|
6,278
|
|
|
|
4,416
|
|
Commodity derivative
premium payable
|
|
|
102
|
|
|
|
135
|
|
Other accrued
liabilities
|
|
|
7,569
|
|
|
|
2,706
|
|
Total current
liabilities
|
|
|
64,866
|
|
|
|
61,586
|
|
LONG-TERM
LIABILITIES:
|
|
|
|
|
|
|
|
|
Long-term
debt
|
|
|
352,758
|
|
|
|
342,952
|
|
Commodity derivative
contracts
|
|
|
3,289
|
|
|
|
2,572
|
|
Asset retirement
obligation
|
|
|
2,361
|
|
|
|
4,841
|
|
Total long-term
liabilities
|
|
|
358,408
|
|
|
|
350,365
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
STOCKHOLDERS'
DEFICIT:
|
|
|
|
|
|
|
|
|
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 March 31, 2018 and
December 31, 2017, 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 March 31, 2018 and
December 31, 2017, respectively, with liquidation preference of
$25.00 per share
|
|
|
21
|
|
|
|
21
|
|
Common stock, par
value $0.001 per share; 800,000,000 shares authorized at March 31,
2018 and December 31, 2017, respectively; 221,544,464 and
218,874,418 shares issued and outstanding
at March 31, 2018 and December 31, 2017, respectively
|
|
|
222
|
|
|
|
219
|
|
Additional paid-in
capital
|
|
|
820,710
|
|
|
|
819,554
|
|
Accumulated
deficit
|
|
|
(867,174)
|
|
|
|
(851,663)
|
|
Total stockholders'
deficit
|
|
|
(46,180)
|
|
|
|
(31,828)
|
|
TOTAL LIABILITIES AND
STOCKHOLDERS' DEFICIT
|
|
$
|
377,094
|
|
|
$
|
380,123
|
|
GASTAR EXPLORATION
INC.
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
|
|
For the Three
Months Ended
March
31,
|
|
|
|
2018
|
|
|
2017
|
|
|
|
(in
thousands)
|
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(15,511)
|
|
|
$
|
(18,698)
|
|
Adjustments to
reconcile net loss to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
Depreciation,
depletion and amortization
|
|
|
8,978
|
|
|
|
4,652
|
|
Stock-based
compensation
|
|
|
1,724
|
|
|
|
996
|
|
Total loss (gain) on
commodity derivatives contracts
|
|
|
5,529
|
|
|
|
(1,300)
|
|
Cash settlements of
matured commodity derivative contracts, net
|
|
|
(1,347)
|
|
|
|
1,683
|
|
Cash premiums paid for
commodity derivatives contracts
|
|
|
(552)
|
|
|
|
—
|
|
Amortization of
deferred financing costs and debt discount
|
|
|
3,177
|
|
|
|
1,710
|
|
Paid-in-kind
interest
|
|
|
6,629
|
|
|
|
—
|
|
Accretion of asset
retirement obligation
|
|
|
56
|
|
|
|
51
|
|
Loss on early
extinguishment of debt
|
|
|
—
|
|
|
|
12,172
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
16,172
|
|
|
|
(9,897)
|
|
Prepaid
expenses
|
|
|
(56)
|
|
|
|
103
|
|
Accounts payable and
accrued liabilities
|
|
|
7,439
|
|
|
|
972
|
|
Net cash provided by
(used in) operating activities
|
|
|
32,238
|
|
|
|
(7,556)
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
Development and
purchase of oil and natural gas properties
|
|
|
(42,341)
|
|
|
|
(21,613)
|
|
Acquisition of oil and
natural gas properties
|
|
|
—
|
|
|
|
(54,498)
|
|
Proceeds from sale of
oil and natural gas properties
|
|
|
97,571
|
|
|
|
13,150
|
|
Proceeds from
(application of proceeds from) non-operators
|
|
|
57
|
|
|
|
(729)
|
|
Purchase of furniture
and equipment
|
|
|
(11)
|
|
|
|
(41)
|
|
Net cash provided by
(used in) investing activities
|
|
|
55,276
|
|
|
|
(63,731)
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
Proceeds from term
loan
|
|
|
—
|
|
|
|
250,000
|
|
Proceeds from
convertible notes
|
|
|
—
|
|
|
|
200,000
|
|
Repayment of senior
secured notes
|
|
|
—
|
|
|
|
(325,000)
|
|
Repayment of revolving
credit facility
|
|
|
—
|
|
|
|
(84,630)
|
|
Loss on early
extinguishment of debt
|
|
|
—
|
|
|
|
(7,011)
|
|
Proceeds from issuance
of common shares, net of issuance costs
|
|
|
—
|
|
|
|
56,366
|
|
Dividends on preferred
stock
|
|
|
—
|
|
|
|
(14,473)
|
|
Deferred financing
charges
|
|
|
—
|
|
|
|
(9,945)
|
|
Increase in restricted
cash
|
|
|
—
|
|
|
|
(369)
|
|
Tax withholding
related to restricted stock and PBU vestings
|
|
|
(565)
|
|
|
|
(585)
|
|
Net cash (used in)
provided by financing activities
|
|
|
(565)
|
|
|
|
64,353
|
|
NET INCREASE
(DECREASE) IN CASH AND CASH EQUIVALENTS
|
|
|
86,949
|
|
|
|
(6,934)
|
|
CASH AND CASH
EQUIVALENTS, BEGINNING OF PERIOD
|
|
|
13,266
|
|
|
|
71,529
|
|
CASH AND CASH
EQUIVALENTS, END OF PERIOD
|
|
$
|
100,215
|
|
|
$
|
64,595
|
|
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 Adjusted Net Loss:
|
|
|
|
For the Three
Months Ended
March
31,
|
|
|
|
2018
|
|
|
2017
|
|
|
|
(in thousands,
except share and per share data)
|
|
NET LOSS ATTRIBUTABLE
TO COMMON STOCKHOLDERS
|
|
$
|
(19,129)
|
|
|
$
|
(22,316)
|
|
SPECIAL
ITEMS:
|
|
|
|
|
|
|
|
|
Losses related to the
change in mark to market value for outstanding commodity
derivatives contracts
|
|
|
3,326
|
|
|
|
582
|
|
Loss on early
extinguishment of debt
|
|
|
—
|
|
|
|
12,172
|
|
Non-recurring
severance costs
|
|
|
3,545
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
ADJUSTED NET LOSS
ATTRIBUTABLE TO COMMON STOCKHOLDERS
|
|
$
|
(12,258)
|
|
|
$
|
(9,562)
|
|
|
|
|
|
|
|
|
|
|
ADJUSTED NET LOSS PER
SHARE OF COMMON STOCK ATTRIBUTABLE TO COMMON
STOCKHOLDERS:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.06)
|
|
|
$
|
(0.06)
|
|
Diluted
|
|
$
|
(0.06)
|
|
|
$
|
(0.06)
|
|
WEIGHTED AVERAGE
SHARES OF COMMON STOCK
|
|
|
|
|
|
|
|
|
Basic
|
|
|
209,903,482
|
|
|
|
162,829,221
|
|
Diluted
|
|
|
209,903,482
|
|
|
|
162,829,221
|
|
Reconciliation of
Cash Flows before Working Capital Changes and to Adjusted Cash
Flows from Operations:
|
|
|
|
For the Three
Months Ended
March
31,
|
|
|
|
2018
|
|
|
2017
|
|
|
|
(in
thousands)
|
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(15,511)
|
|
|
$
|
(18,698)
|
|
Adjustments to
reconcile net loss to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation,
depletion and amortization
|
|
|
8,978
|
|
|
|
4,652
|
|
Stock-based
compensation
|
|
|
1,724
|
|
|
|
996
|
|
Mark to market of
commodity derivatives contracts:
|
|
|
|
|
|
|
|
|
Total loss (gain) on
commodity derivatives contracts
|
|
|
5,529
|
|
|
|
(1,300)
|
|
Cash settlements of
matured commodity derivatives contracts, net
|
|
|
(1,347)
|
|
|
|
1,683
|
|
Cash premiums paid for
commodity derivatives contracts
|
|
|
(552)
|
|
|
|
—
|
|
Amortization of
deferred financing costs and debt discount
|
|
|
3,177
|
|
|
|
1,710
|
|
Paid in kind
interest
|
|
|
6,629
|
|
|
|
—
|
|
Accretion of asset
retirement obligation
|
|
|
56
|
|
|
|
51
|
|
Loss on early
extinguishment of debt
|
|
|
—
|
|
|
|
12,172
|
|
Cash flows from
operations before working capital changes
|
|
|
8,683
|
|
|
|
1,266
|
|
Dividends on preferred
stock
|
|
|
—
|
|
|
|
(3,618)
|
|
Undeclared cumulative
dividends on preferred stock
|
|
|
(3,618)
|
|
|
|
—
|
|
Paid in kind
interest
|
|
|
(6,629)
|
|
|
|
—
|
|
Non-recurring
severance costs
|
|
|
3,545
|
|
|
|
—
|
|
Adjusted cash flows
from operations
|
|
$
|
1,981
|
|
|
$
|
(2,352)
|
|
Reconciliation of
Net Loss to Adjusted Earnings Before Interest, Income Taxes,
Depreciation, Depletion and Amortization ("Adjusted
EBITDA"):
|
|
|
|
For the Three
Months Ended
March
31,
|
|
|
|
2018
|
|
|
2017
|
|
|
|
(in
thousands)
|
|
NET LOSS ATTRIBUTABLE
TO COMMON STOCKHOLDERS
|
|
$
|
(19,129)
|
|
|
$
|
(22,316)
|
|
Interest
expense
|
|
|
9,937
|
|
|
|
10,849
|
|
Loss on early
extinguishment of debt
|
|
|
—
|
|
|
|
12,172
|
|
Depreciation,
depletion and amortization
|
|
|
8,978
|
|
|
|
4,652
|
|
EBITDA
|
|
|
(214)
|
|
|
|
5,357
|
|
Dividends on preferred
stock
|
|
|
—
|
|
|
|
3,618
|
|
Undeclared cumulative
dividends on preferred stock
|
|
|
3,618
|
|
|
|
—
|
|
Accretion of asset
retirement obligation
|
|
|
56
|
|
|
|
51
|
|
Losses related to the
change in mark to market value for outstanding commodity
derivatives contracts
|
|
|
3,326
|
|
|
|
582
|
|
Non-cash stock-based
compensation expense
|
|
|
1,724
|
|
|
|
996
|
|
Investment income and
other
|
|
|
(17)
|
|
|
|
(49)
|
|
Non-recurring
severance costs
|
|
|
3,545
|
|
|
|
—
|
|
ADJUSTED
EBITDA
|
|
$
|
12,038
|
|
|
$
|
10,555
|
|
Contacts:
Gastar Exploration Inc.
Michael A. Gerlich, Chief Financial
Officer
713-739-1800 / mgerlich@gastar.com
Investor Relations Counsel:
Lisa Elliott, Dennard▪Lascar
Investor Relations
713-529-6600 / lelliott@DennardLascar.com
View original
content:http://www.prnewswire.com/news-releases/gastar-exploration-announces-first-quarter-2018-results-300646604.html
SOURCE Gastar Exploration Inc.